Labour Law Notes

1
PREPARED BY
RADHIKA SETH, PLEASE VOTE , BALLOT No. 2
These notes are prepared by Radhika Seth,

Law Centre 2. This is meant only for
personal use of students. It is not meant
for public or wholesale distribution.
VOTE FOR MY PANEL ON 13TH SEPTEMBERELECTION DAY.
RADHIKA SETH
FOR PRESIDENT
ANUBHAV SINGH
FOR SECRETARY
AMIT RANJAN
FOR CC
HARSH TOMAR
FOR CC
1
Industry
During the twentieth century and that too mainly in the post independence period a new branch of
jurisprudence known as Industrial Jurisprudence has developed in India. This branch of law, i.e., the labour
and industrial law, has modified the traditional law relating to master and servant and had cut down the old
theory of laissez-faire based upon the 'freedom of contract' to protect workmen against victimization and unfair
labour practices by the employer and to put an end to industrial disputes by peaceful methods. The old age right of
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an employer to hire and fire his workmen at his will has been subjected to many restraints. Industrial Tribunals
can extend an existing agreement or make a new one, or in general create new rights and obligations or modify
the old ones even against the wishes of the employer or workmen or both. Moreover the right of workers to
participate in management has been given legislative recognition. The departure from the old theories of law
of contract and law of master and servant has not only been in India but all over the world. The industrial society
everywhere has been moving during the present century from contract to status and this status is politico-economic
juristic status.
Thus Industrial Disputes Act which is one of the important industrial legislation was passed in 1947. The object of the
Act as laid down in the preamble of the Act is "to make provision for investigation and settlement of industrial
disputes and for certain other purposes." The main objects of the Act as analyzed by the Supreme Court in
Workman of Dimarkuchi Tea Estate verses Management of Dimarkuchi Tea Estate, are as follows:
(1) The promotion of measures for securing amity and good relations between the employer and workmen.
(2) The investigation and settlement of industrial disputes between employers and employers, employers and
workmen or workmen and workmen, with a right of representation by a registered trade union or a federation
of trade unions or association of employees or a federation or association of employers.
(3) The prevention of illegal strikes and lockouts.
(4) Relief to workmen in the matter of lay-off, retrenchment and closure of an undertaking
(5) Collective bargaining. Definition of Industry
Section 2(j) of Industrial Disputes Act, 1947 before the 1982 amendment defined industry as under:
"Industry" means any business, trade, undertaking, manufacture or calling of employers and includes
any calling, service, employment, handicraft, or industrial occupation or avocation of workmen.
This definition of 'industry' in the Industrial Disputes Act, 1947 had received conflicting interpretation by the
Supreme Court at different times. The scope of the term 'industry' in S. 2(j) of the Act seemed to have had all the
features of the games of snakes and ladders; the term being given a very wide interpretation in Hospital Mazdoor
Sabha case (AIR 1960 SC 610), a narrow interpretation in Safdarjung Hospital case and again the widest
interpretation in Bangalore Water Supply and Sewerage board case.
The aforesaid definition of industry' in S. 2(j) of the Act is in two parts. The first part says that it means any
business, trade; undertaking, manufacture or calling of employers and the second part provides that it includes
any calling, service, employment, handicraft, or industrial occupation or avocation of workmen. 'Industry' as
it was understood can be illustrated by some important decisions on the point.
"The words used in the definition are very wide in their import and even so its latter part purports to provide an
inclusive definition. The word "undertaking" according to Webster means "anything undertaken, any business
work or project which one engages in or attempts, an enterprise". Similarly trade according to Halsbury, in its
primary meaning' is "exchange of goods for goods or goods for money" and in its secondary meaning it is "any
business carried on with a view to profit whether manual or mercantile, as distinguished from liberal arts or
learned professions and from agriculture" whereas "business" is a wider term not synonymous with trade
and means practically "anything which is an occupation as distinguished from a pleasure." The word "calling again
is very wide; it means one's usual occupation, vocation, business, or trade"; so is the word "service" very wide
in its import" (State of Bombay verses Hospital Mazdoor Sabha.
There has not been any difficulty in ascertaining the meaning of the words business, trade, manufacture or
calling of employers in order to determine whether a particular activity systematically carried on with the cooperation of employer and employers is an industry or not but the difficulties have arisen in interpreting the word
"undertaking" in S 2(j) of the Act.
For the first time the question arose in D.N. Banerji verses . RR. Mukherjee, which involved a dispute between a
municipality and its employees. The municipality was held to be an industry and the dispute was held to be an
industrial dispute. The Supreme Court observed that the non-technical ordinary meaning of 'industry' is "an
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undertaking where capital and labour co-operate with each other for the purpose of producing wealth in the
shape of goods, machines, tool etc.", and for making profits, and an industry in this sense includes agriculture,
horticulture etc. But the court said that this is too wide and that every aspect of employer-employee
connection does not result in industry. Holding however, that municipal activity cannot be truly regarded as
business or trade. The Supreme Court considered whether it can mean "undertaking". The suggestion that the
word "undertaking", takes its colour from other four words in the first part of the definition was not accepted. It was
said that this interpretation renders the word "undertaking" superfluous and the latter part of the definition
unnecessary. Therefore, the court included non-profit undertakings in the concept of industry even if there is no
private enterprise. Referring to the inclusion of public utility service in the scheme of the Act it was held that a
dispute in a public utility services is an industrial dispute, and the fact that the enterprise is financed by taxation and
not by capital was considered irrelevant.
In the second case Baroda Municipality verses . Workman, the question again arose whether a municipality
comes within the scope of S. 2(j). The Supreme Court said:
"It is now finally settled by the decision of this Court in 1953 SCR 302, that a municipal undertaking of the
nature we have under consideration is an "industry" within the meaning of the word in Section 2(j) of the
Industrial Disputes Act and includes disputes between the municipality and their employees in branches of work
"that can be regarded as analogous to the carrying on of a trade, or business."
These first two cases laid down that for an activity to be an industry it is not necessary that it must be carried on
by private enterprise or must be commercial or result in profit. It is sufficient if the activity is analogous to the
carrying on of a trade or business and involves co-operation between employers and employees. This result
was achieved by extending the meaning of 'undertaking' to cover adventures not strictly trade or business but
objects very similar. The activity of the municipality was not attempted to be brought within expressions business
and trade. The term "undertaking" was held to cover it.
In the case Corporation of City of Nagpur verses Employees, the question whether and to what extent the
Corporation of Nagpur was an industry under the C.P. and Barar Industrial Disputes Settlement, Act, 1947. That Act
defined industry in a different manner. Under that Act the term "industry" meant:
(a) Any business, trade, manufacturing or minning undertaking or calling of employers,
(b) Any calling, service, employment, handicraft or industrial occupation or avocation of employers, and
(c) Any branch of industry or a group of industries.
In this definition the qualifying words "manufacturing or mining" limited the word undertaking and it could not
be given the wide meaning given earlier. The Supreme Court did not attempt to bring municipal activity
within the word "undertaking" but brought it within the expression "trade, business". It found the definition to
be very clear and not susceptible of any ambiguity and observed that all the words wide and that even if the
meaning could be cut down, the aims and objects of the C.P. and Berar Act as disclosed in the preamble, the
main object, namely social justice demanded a wide meaning. The Court distinguished between (a) regal and (b)
municipal functions of the Corporation and found that the latter analogous to business or trade because they
were not regal and the activity was organised and services rendered.
In the case State of Bombay verses Hospital Mazdoor Sabha, it was held that a hospital run by Government is
included in the definition of "industry". It was however recognised in that case that a line must be drawn to
exclude some callings, services and undertakings. It was held that domestic, personal or casual services are not
included and examples were given of such services. The meaning of industry as an economic activity involving
investment of capital and systematically carried on for profit for the production or sale of goods by employment of
labour was again discarded because profit motive and investment of capital were considered not necessary. Another
test reaffirmed was to enquire whether my such activity be carried on by private individual or group of individuals.
Answering that a hospital can be run by a private party for profit, it was held that a hospital is an industry even if
it is run by Government without profit. It was, however, again emphasized that an undertaking to be an
industry must be analogous to trade or business. The Court laid down the following working principle:
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"As a working principle it may be stated that an activity systematically or habitually undertaken for the
production or distribution of goods for rendering of material services to the community at large or a part of such
community with the help of employees is an undertaking. Such an activity generally involves the co-operation of the
employer and the employees; and its object is the satisfaction of material human needs. It must be organised
or arranged in a manner in which trade or business is generally organised or arranged. It must not be casual, nor
must it be for one's self nor for pleasure. Thus the manner in which the activity in question is organised or arranged;
the condition of the cooperation between the employer and the employee necessary for its success and its object
to render material services to the community can be regarded as some of the features which are distinctive of
activities to which Section 2(j) applies."
In the case Ahmadabad Textile Industry Research Association verses . State of Bombay, it was held that an
Association for the research maintained by the Textile Industry and employing technical and other staff was
industry. The case repeated the tests stated in the Hospital Mazdoor Sabha and applied them. It was observed
that the Association was providing material service to a part of the community, was carried on with the help of
employees, was organised in a manner in which trade or business is organised and there was co-operation between
employer and employees.
However in the next case of National Union of Commercial Employees verses . M.R. Meher, (overruled by
Bang/ore Water Supply, case, where the employers of a firm of solicitors demanded bonus and the case satisfied
the test so far enumerated, a new test was added that the association of capital and labour must be direct and
essential. The service of a solicitor was regarded as individual depending upon his personal qualifications and
ability to which the employees did not contribute directly or essentially. Their contribution, it was held, no direct
or essential nexus with the advice or services. In this way learned professions were excluded from the scope
of industry. This case is also known as Solicitor's case.
In the next case of Harinagar Cane Farm verses . State of Bihar, (1964), a cane farm was purchased by a sugar
factory and worked as a department for supply of sugarcane. The agricultural operations were held to be
industry. It was held that the agricultural operations were organised and carried on in the same manner as trade or
business is carried on by a trader or businessman. In the case University of Delhi verses Ramnath, overruled by
Bangalore Water Supply, case, the question was whether bus drivers employed by the University were workmen,
the concept of service was narrowed and it was held that the educational institutions were not an industry. Their
aim was education and the teachers' profession was not to be assimilated to industrial workers. The Court,
however, stated that it must not be understood as laying general proposition.
In the next case Madras Gymkhana Club Employees Union verses Management of Madras Gymkhana Club,
(overruled by Bangalore Water Supply, case, it was held that the Madras Gymkhana Club being a members' club
was not an industry. The Court said that industry involves the cooperation of employer and employees,
organised like a trade and calculated to supply pleasurable utilities to members and others. The Court agreed that
the material needs or wants of a section of the community was catered for but that was not enough. That must
have been done as part of trade or Business or as an undertaking analogous to trade or business. That element the
Court held, was completely missing' in a members club. The Court said:
"The Club belongs to members for the time being on its list of members and that is what matters. Those
members can deal with the club as they like. Therefore, the Club is identified with its members at a given
point of time. Thus it cannot be said that the Club has an existence apart from its members." With regard to the
two parts of the definition of the term "industry" the Court observed as follows:
"The definition of industry" is in two parts. In its first part it means any business, trade, undertaking, manufacture or
calling of employers. This part of the definition determines an industry by reference to the occupation of
employers in respect of certain activities. These activities are specified by five words and they determine what an
industry is and what the cognate expression "industrial" is intended to convey, this is the denotation of the term
or what the words "business, trade, undertaking manufacture or calling" comprehend. The second part views the
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matter from the angle of employees and is designed to include something more in what the term primarily
denotes. By the second part of the definition any calling, service, employment, handicraft or industrial occupation or
avocation of workman is included in the concept of industry. This part gives the extended connotation. If the activity
can be described as an industry with reference to the occupation of the employers, the ambit of the industry,
under the force of the second part, takes in the different kind of activity of the employees mentioned in the
second part. But the second part standing alone cannot define "industry". Similarly in the case of 'Cricket Club of
India (1961) (overruled by Bangalore Water of Suppy case the Cricket Club of India was held not to be an
industry.
In the next case Safdarjung Hospital, New Delhi verses Kuldip Singh, (1970) (overruled by Bangalore Water
Supply, case, a sharp bend in the course of law came. The Supreme Court considered the facts of the appeals,
clubbed together and held that all the three institutions, namely, (1) Safdarjung Hospital, New Delhi, (2)
Tuberculosis Hospital, New Delhi and (3) Kurji Holy Family Hospital, Patna, in the bunch of appeals were not
industries. In the first case the Supreme Court took the view that a place of treatment of patients, run as a department
of government, was not an industry, because it was a part of the functions of the government. Likewise, dealing
with the Tuberculosis Hospital case, the Court held that hospitals was wholly charitable and also was a research
institute. Primarily, it was an institution for research and training. Therefore, the Court concluded, the institution
could not be described as industry. In the third case the same factors plus the prohibition of profit were relied on by
the Court. The Court also took view that professions must be excluded from the ambit of industry.
It said:
"A profession ordinarily is an occupation requiring intellectual skill, often coupled with manual skill. Thus a
teacher uses purely intellectual skill, while a painter uses both. In any event, they are not engaged in an occupation in
which employers and employees co-operate in the production or sale of commodities or arrangement for their
production or sale or distribution and their services cannot be described as material services... Material services
involve an activity carried on through co-operation between employer and employees to provide the community
with the use of something such as electric power, water transportation, mail delivery, telephones and the
like."
Thus the Supreme Court in Safdarjung Hospital case overruled the Hospital Mazdoor Sabha (Supra). However,
the Supreme Court in Bangalore Water Supply case, overruled the Safdarjung Hospital case and rehabilitated
Hospital Mazdoor Sabha case.
In the case of Management of the FICCI verses . Workmen the Federation of India Chambers of Commerce and
Industry was held to be an industry within the meaning of S. 2(j). The Court said: "The Federation carried on
systematic activities to assist its members and other businessmen and industrialists and even nonmembers as, for instance, in giving them the right to subscribe to their bulletin, in taking up their cases and
solving their difficulties and in obtaining concession and facilities for them from the Government. These
activities are business activities and material services."
Dhanrajgirji Hospital, case, which was decided on the lines of Safdarjung Hospital case was also overruled
by the Supreme Court in Bangalore Water Supply case.
In the case of The Workmen of Indian Standards Institution verses The Management of Indian Standards
Institution, the Supreme court held that the activities of the Indian Standards Institution fall within the
category analogous to trade or business and must be regarded as "industry" as defined in S. 2(j) of the
Industrial Disputes Act, 1947. The court observed.
"The Court should, therefore, as far as possible, avoid formulating or adopting generalizations and
hesitate to cast the concept of industry in narrow rigid mould which would not permit of expansion as and
when necessity arises. Only some working principles may be evolved which would furnish guidance in
determining what are the attibutes or characteristics which would ordinarily indicate that an undertaking is
analogous to trade or business.
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In Bangalore Water Supply and Sewerage Board verses A. Rajappa, (1978) a seven judge bench of the
Supreme Court exhaustively considered the scope of industry. The Supreme Court in this case by a majority of
five with two dissenting overruled Safdarjung Solicitors' case, Gymkhana, Delhi University, Dhanrajgiri
Hospital and Cricket Club of India. It rehabilitated Hospital Mazdoor Shabha and affirmed Indian Standards
Institution. The Court followed Banerji and Corporation of City of Nagpur cases.
There are four judgements: one by Krishna lyer, J for himself, Bhagwati and Desai, JJ; the second by the
former Chief Justice Beg; the third by Chief Justice Chandrachud and the fourth by Jaswant Singh. J., for
himself and Tulzapurkar, J.
The following is the summary of the majority view in the words of Krishna lyer, J., who gave the leading
judgement:
1. Industry as defined in S. 2(j) and explained in Banerji has a wide import.
(a) Where (1) systematic activity,
(2) Organised by co-operation between employer and employee (the direct and substantial element is
chimerical)
(3) for production and/or distribution of goods and services calculated to satisfy human wants and wishes
(not spiritual or religious but inclusive of material things or services geard to celestial bliss, i.e., making on
a large scale Prasad or food), prima facie, there is "industry" in that enterprise.
(b) Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private
or other sector.
(c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on
the employer-employee relations.
(d) If the organization is the trade or business it does not cease to be one because of philanthropy
animating the undertaking.
2. Although Section 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be
magnified to overreach itself.
(a) 'Undertaking' must suffer a contextual and associational shrinkage as explained in Banerji and in
this judgement; so also service, calling and the like. This yields the inference that all organised
activity possessing the triple elements in I (supra) although not trade or business, may still be
'industry' provided the nature of the activity viz., the employer-employee basis, bears resemblance to
what we find in trade or business. This takes into the fold 'industry' undertakings, callings and
services, adventures "analogous to the carrying on the trade or business." All features other than
the methodology of carrying on the activity viz. in organizing the cooperation between employer
and employee may be dissimilar, if on the employment terms there is analogy.
3. Applications of these guidelines should not stop short of their logical reach by invocation of creeds, cults or
inner sense of incongruity or outer sense of motivation for or resultant of the economic operations. The
ideology of the Act being industrial peace, regulation and resolution of industrial disputes between
employer and workmen, the range of this statutory ideology must inform the reach of the statutory definition.
Nothing less, nothing more.
(a) The consequences are:
(1) Professions,
(2) Clubs,
(3) Educational institutions,
(4) Co-operatives,
(5) Research institutes,
(6) Charitable projects and
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(7) Other kindred adventures, if they fulfil the triple tests listed in (supra) cannot be exempted from the
scope of Section 2(j),
(b) A restricted category of professions, clubs, co-operatives and even gurukulas and little research
clubs may qualify for the exemption if the simple ventures, substantively, and going by the dominant
nature criterion, substantially, no employees are entertained but in minimal matters, marginal
employees are hired without destroying the non-employee character of the unit.
(c) If, in a pious or altruistic mission many employ themselves, free or for small honoraria or like
return, mainly drawn by sharing in the purpose or cause, such as lawyers, volunteering to run a free
legal service clinic or doctors serving in their spare hours in a free medical centre or ashramites
working at the bidding of the holiness, divinity or like central personality, and the services are supplied
free or at nominal cost and those who serve are not engaged for remuneration or on the basis of
master and servant relationship, then the institution is not an industry even if stray servants,
manual or technical, are hired. Such elementary or like undertakings alone are exempt not other
generosity, compassion, developmental passion or project.
4. The dominant nature test:
(a) Where a complex of activities, some of which qualify for exemption, others not, involves employees on the
total undertaking, some of whom are not "workmen" as in the University of Delhi or some departments
are not productive of goods and services is isolated, even then the predominant nature of the services
and the integrated nature of the departments as explained in the Corporation of Nagpur will be the
true test. The whole undertaking will be 'industry' although those who are not 'workmen' by definition
may not benefit by the status.
(b) Notwithstanding the previous clauses, sovereign functions, strictly understood, (alone) qualify for
exemption, not the welfare activities or economic adventures undertaken by government or statutory
bodies.
(c) Even in departments discharging sovereign functions, if there are units which are industries and they
are substantially severable, they can be considered to come within S. 2(j).
(d) Constitutional and competently enacted legislative provisions may remove from the scope of the Act
categories which otherwise may be covered thereby.
5. We overrule Safdarjung, Solicitors' case , Gymkhana Delhi University (MR 1963 SC 1873), Dhanrajgiri Hospital
and other rulings whose ratio runs counter to the principles enunciated above, and Hospital Mazdoor Sabha is
hereby rehabilitated."
Thus in Bangalore Water Supply and Sewer age Board Y Rajappa, the Supreme Court laid down the following test
which is practically reiteration of the test laid down in Hospital Mazdoor Sabha case:
Triple test. Where there is a
(1) Systematic activity;
(2) Organised by cooperation, between employer and employee and
(3) For the production and/or distribution of goods and services calculated to satisfy human wants and wishes,
prima facie there is an industry in the enterprise. This is known as triple test,
The following points were also emphasized in this case:
1. Industry does not include spiritual or religious services geared to celestial bliss, e.g., making on large scale
prasad or food,
2. Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private or other
sector.
3. The true test is functional and the decisive test is the nature of the activity with special emphasis on the
employer-employee relations.
4. If the organization is a trade or business, it does not cease to be one because of philanthropy animating the
undertaking.
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5. Although S. 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to
over-reach each other. The word "undertaking" must suffer a contextual and associational shrinkage, so also
"service", "calling" and the like.
The inference is that all organised activity possessing the triple elements although not trade or business may
still be industry provided the employer-employee basis, bears resemblance to what we find in trade or business.
The consequences are:
(1) Professions,
(2) Clubs,
(3) Educational institutions,
(4) Co-operatives,
(5) Research institutions,
(6 charitable projects, and
(7) Other kindered adventures,
If they fulfil the triple test, cannot be exempted from scope of definition of industry under section 2(j) of the
Act.
Dominant nature test. Where a complex of activities some of which qualify for exemption, others not, involve
employees on the total undertaking some of whom are not "workmen" or some departments are not
productive of goods and services if isolated, even then the predominant nature of the services and the
integrated nature of the departments will be the true test, the whole undertaking will be "industry" although
those who are not workmen by definition may not benefit by the status.
Exceptions. A restricted category of professions, clubs, co-operatives and even gurukulas and little research labs, may
qualify for exemption if in simple ventures, substantially and, going by the dominant nature criterion substantively, no
employees are entertained but in minimal matters, marginal employees are hired without destroying the nonemployee character of the unit.
If in pious or altruistic mission, many employ themselves, free or for small honorarium or like return, mainly
drawn by sharing in the purpose or cause, such as lawyers volunteering to run a free legal services clinic or doctors
serving in their spare hours in a free medical centre or ashramites working at the bidding of the holiness, divinity
or like central personality, and the services are supplied free or at nominal cost and those who serve are not
engaged for remuneration or on the basis of master and servant relationship, then, the institution is not an
industry even if stray servants, manual or technical are hired. Such elementary or like undertakings alone are
exempt, not other generosity, compassion, developmental passion or project.
Sovereign functions, strictly understood, (alone) qualify for exemption, not the welfare activities or economic
adventures undertaken by Governmental or statutory bodies. Even in departments discharging sovereign
functions, if there are units which are industries and they are substantially severable, then they can be
considered to come within section 2(j).
In Coir Board, Ernakulam verses Indira Devai PS (I) (1998), the two-Judge Bench of the Supreme Court said:
"The definition of industry under the Industrial Disputes Act was held to cover all professions, clubs,
educational institutions, cooperatives, research institutions, charitable projects and anything else which
could be looked upon as organised activity where there was a relationship of employer and employee and
goods were produced or service was rendered. Even in the case of local bodies and administrative
organizations the Court evolved a 'predominant activity' test so that whenever the predominant activity
could be covered by the wide scope of the definition as propounded by the Court, the local body or the
organization would be considered as an industry. Even in those cases where the predominant activity
could not be so classified, the Court included in the definition all those activities of the organization
which could be so included as industry, departing from its own earlier test that one had to go by the
predominant nature of the activity. In fact, Chandrachud, J. (as he then was) observed that even a
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defence establishment or a mint or a security press could, in a given case, be considered as an industry.
Very restricted exemptions were given from the all embracing scope of the definition so propounded. For
example, pious or religious missions were considered exempt even if a few servants were hired to help
the devotees. Where normally no employees were hired but the employment was marginal the
organization would not qualify as an industry. Sovereign functions of the State as traditionally
understood would also not be classified as industry though Government departments which could be
served and labelled as industry would not escape the Industrial Disputes Act.
The majority laid down the 'dominant nature test for deciding of whether the establishment is an industry
or not."
Suggestion. Constitutional and competently enacted legislative provisions may well remove from the scope of
Industrial Disputes Act categories which otherwise may be covered thereby. The Parliament must step in
and legislate in a manner which will leave no doubt as to its intention.
However, doubting the correctness of the tests laid down in Bangalore Water Supply & Sewerage Board
verses Rajappa and pointing out the damaging effects of the extended meaning given to " industry" is this case,
a two-judge bench of the Supreme Court in Coir Board verses Indira Devai RS., (1998), observed that a larger
bench should be constituted to reconsider Bangalore Water Supply & Sewerage Board M. Rajappa
decision. It was further observed that since the notification bring into effect the 1982 amendment to S. 2(j) of
the Industrial Disputes Act has not been issued by the executive so far the matter should be judicially reexamined. Hence matter referred to larger Bench to reconsider the decision in that case. In Coir Board
verses Indira Devai RS., (2000) 1 SCC 224, the larger Bench of the Supreme Court held that the Bangalore
Water Supply and Sewerage Board verses Rajappa decision "does not require reconsideration".
Difficulty in defining "industry". The Supreme Court observed, "Industry, therefore, cannot be strictly
defined but only be described. Such a rule, however, leaves too wide a door open for speculation and
subjective notions as to what is describable as an industry. It is best to look for a rough rule of guidance by
considering what the concept of industry must exclude."
New definition of "industry" but not yet given effect till date
The definition of "industry" was amended in 1982 and is reproduced below. It shall stand substituted w.e.f. the
date to be notified.
(j) "Industry" means any systematic activity carried on by co-operation between an employer and his
workmen (whether such workmen are employed by such employer directly or by or through any agency including
a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants
or wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not
(1) Any capital has been invested for the purpose of carrying on such activity;
Or
(2) Such activity is carried on with a motive to make any gain or profit. and includes
(a) Any activity of the Dock Labour Board established under section 5-A of the Dock Workers (Regulation of
Employment) Act, 1948;
(b) Any activity relating to the promotion of sales or business or both carried on by an establishment. But does not
include
(1) any agricultural operation except where such agricultural operations' carried on in an integrated manner
with any other activity (being any such activity as is referred to in the foregoing provisions of this clause and such
other activity is the predominant one).
Explanation. For the purpose of this sub-clause "agricultural operation " does not include any activity carried on in a
plant at ion as defined in clause (f) of Sect ion 2 the Plantation Labour Act, 1951, or
(2) Hospital or dispensaries, or
(3) Educational, scientific, research or training institutions; or
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(4) Institutions owned or managed by organization wholly or substantially engaged in any charitable, social or
philanthropic service; or
(5) Khadi or village industries; or
(6) any activity of the Government relatble to the sovereign functions of the Government including all the
activities carried on by the departments of the Central Government dealing with defence, research, atomic energy
and space; or
(7) Any domestic service; or
(8) any activity, being a profession practiced by an individual or body of individuals, if the number of persons
employed by the individual or body of individuals in relation to such profession is less than ten; or
(a) Any activity, being an activity carried on by a co-operative society or a club or any other like body of individuals,
if the number of persons employed by the co-operative society, club or other like body of individual in
relating to such activity is less than ten.
It may be noted that the amendment has not yet been brought into force. The earlier definition of 'industry'
still continues to be valid and effective.
This definition has incorporated the triple test laid down in Bangalore Water Supply case, but has excluded many
activities like hospitals, educational institutions, etc.
In Des Raj verses State of Punjab, the irrigation Department of the State of Punjab was held to bean "industry"
within the meaning of S. 2(j) of the Industrial Disputes Act as it stands at present. The Supreme Court applied
the tests laid in various decisions of the Supreme Court and particularly the dominant nature test evolved by
Krishna lyer, J. in Bangalore Water Supply and Sewerage Board case. The Supreme Court further stated in the
above case that though by S. 2(c) of the Amending Act 46 of 1982, the definition of industry had been amended
but the amendment has not yet been brought into force even after a lapse of six years. "It is appropriate that
the same should be brought in force as such or with such further alterations as may be considered necessary, and
the legislative view of the matter is made known and the confusion in the field is cleared up. In the event of the
definition of industry being changed either by enforcement of the new definition of industry or by any other legislative
change, it would always be open to the aggrieved Irrigation Department to raise the issue again and the present
decision would not stand in the way of such an attempt in view of the altered situation."
In Karmani Properties Ltd. verses State of West Bengal, the appellant company owned several mansion houses.
There were about 300 flats in those mansions which had been let out to tenants. The appellant provided various
facilities to its tenants in these flats, e.g., free supply of electricity, washing and cleaning of floors and
lavatories, lift service, electric repairs and replacing, etc. and for that purpose the company employed 50 liftman,
durwans, pumpmen, electric and other mistries, bill collectors and bearers etc. in connection with those properties. A
dispute arose between the employees of the company and the company with regard to wages, scales of pay.
Held that the activities carried on by the company fell within the ambit of the expression "industry" defined in S.
2(j) of the Industrial Disputes Act as constructed by the Supreme Court in Bangalore Water Supply and Sewerage
Board case.
In Gurmail Singh verses State of Punjab, it was held that running of tubewells by Government or Government
owned corporation constitutes "industry".
In All India Radio verses Santosh Kumar, AIR 1998 SC 941, it was held that "All India Radio" and "Doordarshan"
are covered by the definition of "industry" within the meaning of S. 2(j) of the Act. The functions which are carried
on by All India Radio and Doordarshan cannot be said to be confined to sovereign functions as they carry on
commercial activity for profit by getting commercial advertisements telecast or broadcast through their various
Kendras and stations by charging fees.
In General Manager, Telecom verses A Srinivasa Rao, Telecom Department of Union of India was held to be an
'industry'. Similar was the decision in Asha Rani verses Divisional Engineer, Telecom Department, (2001) . In SubDivisional Inspector of Post, Vaikan, verses Theyyam Joseph, it was held that the functions of the Postal
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Department are part of the sovereign functions of the state, it is, therefore, not an 'industry'. This case was
decided without reference to the Bangalore Water Supply case. In G.M, Telecom verses Srinivasa Rao (supra), it
was held that the decision in Theyyam Joseph case cannot be treated as laying down the correct law. In
Physical Research Laboratory verses K.G. Sharma, the Physical Research Laboratory was held not an 'industry'
because it is purely a research organization discharging governmental functions and a domestic enterprise than a
commercial enterprise, though it is taking employees' co-operation in achieving its purpose.
In Agricultural Produce Market Committee verses Ashok Harikuni, (2000) 8 SCC 61, it was held, on facts, that
none of the functions of the Market Committee established under Karnataka Agricultural Produce Marketing
(Regulation) Act, 1966 "are sovereign or inalienable functions of the state". Therefore, such a market
committee was held to be an 'industry'.
In Bharat Bhawan Trust verses Bharat Bhawan Artists' Association, (2001) 7 SCC 630, the issue before the
Supreme Court was whether a trust for promotion of art and culture could be called an 'industry'. Without
deciding the said issue finally, it was held, since Bharat Bhawan Trust is engaged only in promotion of art and
preservation of artistic talent and its activities being not of those in which there can be a large scale production to
involve co-operation of efforts of the employer and employee, it is doubtful to hold it as an 'industry' under the
definition given under S. 20) of the ID Act.
In State of Gujarat verses Pratam Singh Narsingh Par mar, it was held that if a dispute arises as to whether a
particular establishment or part of it wherein an appointment has been made is an industry or not, it would be for
the person concerned who claims the same to be an 'industry', to give positive facts for coming to the conclusion
that it constitutes an 'industry'. Ordinarily, a department of the Government cannot be held to be an industry
and rather it is a part of the sovereign function. In this case on the basis of the assertion made by the Chief
Conservator of Forests the Court held that the scheme that had been undertaken by the department of the State
of Gujarat wherein the employee had been recruited cannot be regarded as a part of the sovereign functions
of the state. The Court distinguished this case and Chief Conservator of Forests v Jaganath Maruti Kondhare,
(1996) 2 SCC 293. In the latter case the Forest Department of the State of Maharashtra was held to be an
'industry'.
In Som Vihar Apartment Owners' Housing Maintenance Society Ltd. verses Workmen, Association or
Society of apartment owners employing persons for rendering personal services to its members, held, not "industry"
for the purposes of S. 2(j), Industrial Disputes Act. Such employees would not be "workmen" under the Act.
In Parmanand verses Nagar Palika, Dehradun, (2003) 9 SCC 290, Engineering Department of Municipality
(respondent Nagar Palika) was held an 'industry' Inclusion of municipality in the Constitution by itself
would not change this position.
In State of U.R verses Jai Bir Singh, (2005) 5 SCC 1, five judge Bench of the Supreme Court observed that
interpretation given by majority Judges (Krishna lyer, J. speaking for himself and Bhagwati and Desai, JJ) in
Bangalore Water Supply & Sewerage Board verses . A. Rajappa, is over expansive and one sided i.e. only
worker oriented. Court held that it requires reconsideration by a larger Bench for the following reasons:
(1) The decision in Bangalore Water Supply case was not a unaminous decision;
(2) Of the five Judges who constituted majority, three had given a common opinion but the two others had
given separate opinions projecting a view partly different from the views expressed in the opinion of the other
three Judges;
(3) Majority opinion expressed the view that their interpretation was only tentative and temporary till
the Legislature stepped in and removed vagueness and confusion;
(4) Judges in the said decision rendered different opinions at different points of time in some instances
without going through opinion of other three Judges;
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(5) Worker-oriented approach in construing the definition of industry, unmindful of the interest of the
employer and the public who are the ultimate beneficiaries, is a one-sided approach and not in accordance
with the provisions of the Act;
(6) "Sovereign functions", should not be confined to its traditional concept but should comprehend public
welfare activities which Government undertakes in discharge of its constitutional obligations and as such should
fall outside the purview of "industry". Hence, hospitals and educational and research institutions, etc. should
be kept outside the purview of "industry";
(7) Even though the Act was amended in 1982 yet it has remained unforced and confusion still prevails;
(8) The judicial interpretation seems to be one of the inhibiting factors in enforcement of the amended
definition. The helplessness of the legislature and the executive in bringing into force the amended definition
makes reference imperative;
(9) In Bangalore Water Supply case not all the Judges in interpreting the definition clause invoked the
doctrine of noscitur a sociis. Unanimous decision of a Bench of Six Judges in Safdarjung Hospital, (1970)
expressing the view that although "profit motive" is irrelevant, in order to encompass the activity within
"industry" the activity must be "analogous to trade or business in a commercial sense";
(10) Experience of past years showing that the majority view in Bangalore Water Supply, instead of ushering in
industrial peace, has given rise to large number of awards granting reinstatement in service and huge amounts
of back wages to workers compelling the employers having moderate assets to close down their industries
causing harm not only to employers and workers but to the public in general, they being the ultimate
beneficiaries;
(11) Interpretation should be a balanced one having regard to the interest of the workers, the employers as
also the public. Object of the Act has to be kept in view;
(12) Liberal profession based on talent, skill and intellectual attainments such as those of lawyers, doctors,
chartered accounts, architects, etc. should not fall within "industry".
The Supreme Court concluded that it is, therefore, for the large Bench of the Supreme Court to interpret the
definition clause in the present context with the experience of all these years, keeping in view the unenforced
amended definition of "industry".
In Umesh Korga Bhandari verses Mahanagar Telephone Nigam Ltd., it was held (on the question whether
MTNL included in the definition of industry as it stands) that in light of question as to scope of meaning of
"industry" having been referred to larger Bench in Jai Bir Singh case (2005) 5 SCC 1, present appeals to remain
pending till decision of the larger Bench.
In State of Rajasthan verses Ganeshi Lal, (2008) , it was held that the accepted concept of "Industry" cannot
be applied to Law Department of the Government.
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2
Workman
Definition of Workman
Section 2(s) of the Industrial Dispute Act, 1947 (as amended in 1982 w.e.f. 21.8.1984) gives the definition
of workman' which is reproduced below:"Workman" means any person (including an apprentice) employed in any industry to do any manual,
unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of
employment be express or implied, and for the purposes of any proceeding under this Act in relation to an
industrial dispute, includes any such person who has been dismissed, discharged or retrenched in
connection with, or as a consequence of that dispute, or whose dismissal, discharge or retrenchment has led to
that dispute, but does not include any such person(1) who is subject to the Air Force Act, 1950, or the Army Act, 1950 or the Navy Act, 1957, or
(2) who is employed in the police service or as an officer or employee of a prison; or
(3) who is employed mainly in a managerial or administrative capacity;
or
(4) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per
mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers
vested in him, functions mainly of a managerial nature. Note: The scope of the term 'workman' has been
enlarged by the Industrial Disputes (Amendment) Act, 1982 to cover the supervisory staff whose wages do not
exceed Rs. 16007- per month. Before the amendment the limit was Rs. 500/-per month. For earlier definitions of
'workman' see H.R. Adyanthaya case.
The definition of workman as given in the Act is analyzed as under: Analysis of Definition of Workman
1. Industry. The person must be employed in an industry within the meaning of S.2(j)of I.D. Act, 1947.
2. Employer-employee relationship. The essential condition of a person being a workman within the term of
the definition is that he must be employed in an industry, i.e., there must be employment of his by the employer
and there must be a relationship between the employer and him as between employer and employee or master
and servant. It is necessary that a person to be a workman must be in a 'contract o/service', and not
contract for service.' Merely a contract to do some work is not enough. An independent contractor is excluded
from the definition of workman as there does not exist the relationship of master and servant in such a case. In
other words an independent contractor js not a workman. An independent contractor is not under the control of the
master. The element of control distinguishes an employee from an independent contractor.
In Dharangdhara Chemical Works, verses . State of Saurashtra, it was observed that the uniformally
applied test to determine employer-employee relationship is the existence of the right in the master to supervise
and control the work done by the servant not only in directing what work the servant is to do, but also the
manner in which he shall do his work.
The test is, however, not accepted as universally correct. There are many contracts of service where the
master cannot control the manner in which the work is to be done as in the case of a captain of a ship or
chauffeur or report on the staff of a newspaper.
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In Short verses J. W. Henderson Ltd., (1946) AC 24 (HL), the House of Lords gave four indicia of contract of
service, viz., (a) the master's power of selection of his servant, (b) the payment of wages or other
remuneration, (c) the master's right to control the method of doing the work, and (d) the master's right of
suspension or dismissal. But it was further observed:
"Modern industrial conditions have so much affected the freedom of the master in cases in which no one could
reasonably suggest that the employee was, thereby converted into an independent contractor that, if and when
an appropriate occasion arises, it will be incumbent on this House to reconsider and to restate these indicia. For
example, (a), (b) and (d) and probably also (c) are affected by the statutory provisions and rules which restrict the
master's choice of men supplied by the labour bureau, or directed to him under the Essential Work provisions,
and his power of suspension or dismissal is similarly affected. These matters are also affected by trade union rules
which are at least primarily made for the protection of wage-earners."
Therefore, it was held by the House of Lords that the principal requirement of a contract of service is the right of
master in some reasonable sense to control the
method of doing the work.
The position in law is thus summarized in Halsbury's Laws of England, Vol. 22, page 112, para 191:" Whether or not, in any given cases, the relation of master and servant exists is a question of fact; but in all cases
the relation imports the existence of power in the employer not only to direct what work the servant is to do but
also the manner in which the work is to be done; and until the position is restated as contemplated in Short
verses J. W. Henderson Ltd., (1946) AC 24 (HL), we may take it as the prima facie test for determining the
relationship between master and servant."
The principle which emerges from these authorities is that the prima facie test for determination of the employeremployee relationship is the existence of a right to control not only what is to be done by the servant but
also the manner in which he shall do his work But the nature or extent of control which is required to establish
the relationship of employer and employee varies from business to business and is by its very nature incapable
of precise definition. The correct method of approach, therefore, would be to consider whether having
regard to the nature of work there was due control and supervision by the employer. In this connection
Flecher Moulton, L.J., in Simmons verses Health Laundry Company observed as follows:
"In my opinion it is impossible to lay down any rule of law distinguishing the one from the other. It is a question
of fact to be decided by all the circumstances of the case. The greater the amount of direct control exercised
over the person rendering the service by the person contracted for the stronger the grounds for holding it to be a
contract of service and similarly the greater the degree of independence of such control the greater the probability
that the services and that the contract is not one of service."
On the authority of Sadler verses Henlock, Blake verses Thirst and Halsbury's Laws of England the Supreme
Court field in Dharangdhra Chemical Works Ltd. v State of Saurashtra, that a person can be workman even
though he is paid not per day but by the job. If a person is a worker and not a contractor it makes no difference that
his work is piece work. It was further observed in that case that to determine "whether a person is a workman or an
independent contractor is whether he has agreed to work personally or not. If he has, then he is a workman and the
fact that he takes assistance from other persons would not affect his status." In this case the Supreme Court held
that the 'aghiaras' engaged in salt works (seasonal activity) who had agreed to work personally, and on whom
there was due control and supervision having regard to the nature of work, are workmen even though they
employ other persons to assist them.
In Chintaman Rao and Another verses State of M.R, it was held that test laid down in Dharangdhara
Chemical Works case (supra) with respect to S.2(s) of the Industrial Disputes Act would also apply to S.2(l) of the
Factories Act. It was further pointed out that the question whether a particular person working in a factory
was an independent contractor or a worker would depend upon the terms of the contract entered into
between him and the employer and no general proposition could be laid down which would apply to all cases. This
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was reiterated in Hussainbhai, Calicut verses The Alath Factory Tezhilali Union, Kozhikode, AIR 1978 SC
1410.
In Hussainbhai case a number of workmen were engaged in the making of ropes in a factory of the
petitioner but they were hired by contractors who had executed agreement with the factory to get such work
done. An industrial dispute arose when the factory refused employment to 29 workers atid the matter was refened by
the State Government for adjudication, it was held by the Supreme Court the they fell within the definition
of'workman1. The Court said: "The facts found art that the work done by the workmen was an integral part of the
industry concerned. that the raw material was supplied by the management, that the factory premises belonged
to the management and the finished product was taken by the management for its own trade. The workman was
broadly under the control of the management and rejected articles were directed to be rectified by the
management." Thus it was held that the workmen were workmen of the petitioner Who is an employee in
Labour Law? This was the short question raised in the instant case but covered by earlier decision. The Court
further said:
"The true test may, with brevity, be indicated once again. Where a worker or group of workers labours to produce
goods or services and these goods or services are for the business subststance, skill, and continued employment.
the, for any reason, chokes off. the worker is, virtually, laid off. The presence of intermediate contractors with
whom alone workers have immediate or direct relationship ex controctu is of no consequence when, on lifting
the veil or looking at the conspectus of factors governing employment, we discern the naked truth, though
draped in different perfect paper arrangement, that the real employer is the Management, not the immediate
contractor. Myriad devices, half-hidden in fold after fold of legal form depending on the degree of
concealment needed, the type of industry; the local conditions and the like may be resorted to when labour
legislation casts welfare obligations on the real employer, based on Articles 38, 39, 42, 43 and 43-A of the
Constitution.
The court must be astute to avoid the mischief and achieve the purpose of the law and not be misled by the maya
of legal appearances," "'Workman " and an Independent contractor compared. The broad distinction between a
workman and an independent contractor lies in this that while the former himself agrees to work, the latter agrees
to get other persons to work. If a person who agrees himself to work and so work is a workman. A workman does
not cease to be a workman by reason merely of the fact that he gets other persons to work along with him
and that those persons are controlled and paid by him. What detenuines whether a person is a workman or
an independent contractor is whether he has agreed to work personally or not. If he , then he is a workman and the
fact that he takes assistance from other persons would not affect his status. Dharangdhara Chemical Works Ltd.
verses Stat. of Saurashtra.
An employee unlike the contractor is under the control and supervision of the employer in respect of the
details of the work. A contractor on the other hand is required to do specific work for other persons without
submitting himself to their control in respect of the details of the work, Chintaman Rao verses . State of M.R,. In
M/s. Shining Tailors verses Industrial Tribunal 11 U.R Luchnow and Others, (1983) 4 SCC 464, it was held that
payment on piece rate by itself does not disprove the relationship of master and servant. On [acts, the right to
reject the work or to refuse further work, held establish master servant relationship.
An independent contractor is one who undertakes to produce a given result but so that in the actual execution
of the work he is not under the control or order of the person for whom he does it, and may use his own discretion
in things not specified before hand. A workman is under the command of his master as to the manner in which he
shall do his work.
Dismissed and discharged workman is still a workman. For the purposes of any proceeding under the I.D. Act,
1947 in relation to an industrial dispute, workman includes any such person who has been dismissed, discharged
or retrenched in connection with, or as a consequence of that dispute, or whose dismissal, discharge or
retrenchment has led to that dispute.
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In G.B. Pant University of Agriculture & Technology verses State of U.P., the workers of the cafeteria, required by
regulations to be maintained in a residential university and to be compulsorily used by resident-students, were held
employees of the university. The Apex Court applied the twin conventional tests of implicit obligation and
overall control and supervision to determine the issue. It was further held that mere financial difficulties could
not justify taking of a view to the contrary.
In Indian Banks Association verses Workmen of Syndicate Bank, (2001) 3 SCC 36: Commission agents, deposit
collectors of banks, although were not regular employees, held, nonetheless covered. Relationship of master and
servant did exist between the bank and such workmen. Banking Regalation Act did not bar employment of persons
on commission basis.
In Workmen of Nilgiri Co-operative Marketing Society Ltd. verses State of Tamil Nadu, (2004) 3 SCC 514: it
was held that to determine whether a contract is a contract of service or contract for service and whether the
employees concerned are employees of the contractor, test of organisation or control and supervision are not
the only decisive tests. Different test, held, applicable in different facts and circumstances,. All relevant factors must be
integrated. The factors which would have bearing on the result are: (a) who is the appointing authority; (b) who is the
paymaster; (c) Who can dismiss; (d) how long alternative service lasts; (e) the extent of control and supervision; (0
the nature of the job whether it is professional or skilled work; (g) nature of establishment; (h) the right to
reject. In this case marketing service society getting works done through third parties contracts, having regard to all
relevant factors and circumstances, held, such workers were not workers of the factory. If the provisions of the
contract as a whole are inconsistent with its being a contract of service, it will be some other kind of contract and
the person doing the work will not be a servant. The Court further held that the burden of proof lies on the
party setting up plea regarding the existence the impugned relationship. It is a pure question of fact whether
workers employees of principal employer or of contractor.
In Oil and Natural Gas Corporation Limited K.G. Project Rajahmundry verses N. Satyanarayan and Others,
(2003) III LLJ 289 AP, labourers engaged by the second respondent for doing certain work for the appellant were
held not workmen of the appellant.
3. Nature of duties: To be a workman a person must be employed to do any manual, unskilled, skilled,
technical, operational, clerical or supervisory work for hire or reward. Manual work involves hard physical work
requiring use of hands, e.g., a Mali looking after the gardens. Unskilled work requires no special skill or training,
e.g., a peon. Skilled work requires ability gained by special experience or training, e.g.; a carpenter. Technical
means dealing with the practical, industrial or mechanical arts or the applied sciences. Technical work involves the
application of scientific or technical knowledge. Clerical work means the work relating to office clerks. It involves
minor duties such as typing letters, filing letters, writing cash book, keeping records etc. It does not involve
excessive physical or mental work. Supervisory work, e.g., recommending leave application, involves directing
or managing the work of others. If the person is employed in a supervisory capacity he must not be drawing
wages exceeding Rs. 1600/- per month and he must not be working mainly in a managerial capacity.
In Burmah Shell Oil Storage and Distributing Co. verses Management Staff Association it was held by
the Supreme Court that if the work done by an 'employee' is not skilled or unskilled manual work, supervisory work,
technical work or clerical work, he would not be a workman. The specification of four types of work is
obviously intended to lay down that an employee is to become a workman only if he is employed to do work of
one of those types, while there may be employees who, not doing any such work, would be out of the scope of
the word "workman" without having to resort to the exceptions. An example, which appear to be very clear,
will be that of a person employed in cavassing sales for an industry.
Frequently, an employee is required to do more than one kind of work or he may be doing clerical work as
well as supervisory work. He may be doing manual work as well as supervisory work. He may be doing
technical work as well as supervisory work. In Burmah Shell Oil Storage and Distributing Co. verses Management
Staff Association, , the Supreme Court following May & Baker (India) Ltd. verses Workman, South Indian Bank Ltd.
verses A.R. Chacko, and Anand Bazar Patrika (Private) Ltd. verses Its Workman, (1970) 3 SCC 248, held that
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principle is now well settled that a workman must be held to be employed to do that work which is the main
work he is required to do even though he may be incidentally doing other types of works. In Anand Bazar Patrika
case the Court held that if a person is mainly doing supervisory work but incidentally or for a fraction of the time
also does some clerical work, he is employed in supervisory capacity, and, conversely, if the main work done
is of clerical nature, the mere fact that some supervisory duties are also carried out incidentally or as a small
fraction of the work done by him will not convert his employment as a clerk into one in supervisory capacity. In
Jaques verses Owners of Steam Tug Alexandra, (1921) 2 AC 399, it was held by the House of Lords that the real
test is the substantial nature of the employment.
Similarly in Punjab Co-operative Bank Ltd. verses R.S. Bhatia, AIR 1975 SC 1898, it was held that a person shall
be deemed to be employed to do that work which is his main work he is required to do even though incidentally
does some other types of work also. In this case an accountant of a bank was held not to be employed
mainly in a managerial or administrative capacity merely because of the fact that he used to sign salary bills of
the staff.
In S.K. Maim verses . Carona Sahu Co, Ltd., the larger bench of the Supreme Court held as follows:
"Whether or not an employee is a workman under S.2(s) of the Industrial Dispute Act is required to be
determined with reference to his principal nature of duties and functions. Such question is required to be
determined with reference to the facts and circumstances of the case and materials on record and it is not possible
to lay down any strait-jacket formula which can decide the dispute as to the real nature of duties and functions
being performed by an employee in all cases. When an employee is required to do more than one kind of work it
becomes necessary to determine under which classification under S. 2(s) the employee will fall for the purposes
of deciding whether he comes within the definition of workman or goes out of it. The designation of an employee
is not of much importance and what is important is the nature of duties being performed by the employee. The
determinative factor is the main duties being performed by the employee concerned and not some works
incidentally done Viewed from this angle, if the employee is mainly doing supervisory work but incidentally or for
a fraction of time also does some manual or clerical work, the employee should not be held to be doing
supervisory work. Conversely, if the main work is of manual, clerical or of technical nature, the mere fact that some
supervisory or other work is also done by the employee incidentally or only a small fraction of working time is
devoted to some supervisory works, the employee will come within the purview of "workman" as defined in S.2(s)
of the Industrial "Disputes Act,"
In the above case, on facts, Incharge of shop was held not a workman The above case is based upon the
definition of workman before it was amended by Act 46of 1982 w.e.f 21.8.1984.
In H.R. Adycmthaya verses Sandoz (India) Ltd,, AIR 1994 SC 2608, the Supreme Court held that in order to fall
within the definition of workman, a person must be employed to do any of categories of work mentioned in
the main body of the definition (viz., manual, unskilled, skilled, technical, operational etc.) and it is not enough
that he is not merely covered by any of the four exceptions to the definition. It further held that the word 'skilled'
must be read ejusdem generis to mean skilled whether manual or non-manual and as such medical representatives
are not skilled workmen, nor 'technical' or 'operational' workers. Their work is not covered by any type of works
mentioned in the main body of the definition. Section 2(d) of the Sales Promotion Employees (Conditions of Service)
Act, 1976 (as originally stood prior to its amendment in 1986 w.e.f. 6.5.1987) provided that sales promotion
employees drawing wages not exceeding Rs. 750 per mensum (excluding commission) or Rs. 9,000 per
annum (including commission) only included within the definition. It was held that the definition clause is not
discriminatory Workmen doing work can be classified on the basis of their income. It is a matter of legislative
discretion in which Court cannot interfere. The object of the legislation appears to be to give protection to the
service conditions of the weaker sections of the employees belonging to the said category.
In Hitssan Mithu Mhasvadkar verses Bombay Iron and Steel Labour Board, (2001) 7 SCC 394, it was held that
predominant nature of the service of a person is the true and proper test. Designation alone of the employee is not
decisive and what really should go into consideration is the nature of his duties and the powers conferred upon,
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as well as the functions assigned to him. An Inspector appointed under s. 15 of the I.D. Act, 1947 cannot be
considered to be engaged in doing any manual, unskilled, technical, operational, clerical or supervisory work
and the mere fact that in the course of performing his duties he had also to maintain, incidentally, records to
evidence the duties performed by him, day to day, cannot result in the conversion of the post of "Inspector" into
any one of the said nature without which the appellant could not fall within the definition of "workman". The
powers of an Inspector and duties and obligations casts upon him as such are identical and akin to law enforcing
agency or authority and also on a par with prosecuting agency in the public law field.
In Mukesh K. Tripathi verses . Senior Divisional Manager, LIC, it was held that the definition of workman in
S. 2(s) is exhaustive. Hence the position in law as it obtains today is that a person to be a workman under the
Industrial Disputes Act must be employed to do the work of any of the categories viz manual, unskilled, skilled,
technical, operational, clerical or supervisory for hire or reward. The same must be established even if a person
does not perform managerial or supervisory duties. It is not enough that he is not covered by any of the four
exceptions to the definition. S. K. Verma, (1983) , Delton Cable, (1984) and Ciba Geigy, (1985), held to be not good
law in the light of the Constitution Bench decision in H.R. Adyanthaya case. Instead ratio of May and Baker case,
and cases following the same as approved in H.R. Adyanthaya followed. It was held, on facts, the appellant
had not adduced any evidence whatsoever that he had preferred any skilled, unskilled, manual, technical or
operations duties. His letter of appointment clearly proved that he was appointed as apprentice and not to do
any job that fitted the above descriptions. The appellant was held not workman. The cases of S.K. Verma, (1983) 4
SCC 214, Delton Cable, (1984) 2 SCC 569 and Ciba-Geigy, (1985) 3 SCC 371 are based on facts found in those cases.
They have, therefore, to be confined to those facts. S. K. Verma has not been expressly overruled in H.R. Adyanthaya
but once the said decision has been held to have been rendered per incuriam it cannot be said to have laid down
good law.
In Mukesh K. Tripathi, (2004) 8 SCC 387, the following cases were followed: H.R. Adyanthaya verses Sandoz
(India) Ltd., (1994) 5 SCC 737; May and Baker (India) Ltd. verses Workmen, (1964) 3 SCR 560; Burma Shell Oil
Storage & Distribution Co. of India Ltd. verses Burma Shell Management Staff Association, (1970) 3 SCC 378.
In Mukesh K. Tripathi, (2004) 8 SCC 387, the following cases were rendered per incuriam and not good law
(they have, therefore, to be confined to those facts):
S.K. Verma verses Mahesh Chandra, (1983) 4 SCC 214; Ved Prakash Gupta verses Delton Cable India (?)
Ltd., (1984) 2 SCC 569; Arkal Govind Raj Rao verses Ciba Geigy India Ltd., (1985) 3 SCC 371; Sundarambal verses
Government of Goa, Daman.
In Sonepat Co-op. Sugar Mills Ltd. verses . Ajit Singh, (2005), it was held that to fall within the definition
of workman, job of employee concerned must fall within one or the other categories enumerated in the said
expression. Merely showing that the employee concerned had not been performing any managerial or
supervisory duties does not ipso facto make him a workman. In this case the respondent workman, possessing a
law degree appointed as a Legal Assistant, claimed to be a workman performing tasks of "legal clerical nature". He
rendered legal opinions, drafted pleadings, represented appellant before various courts/authorities and
discharged quasi-judicial function as an enquiry officer in domestic enquiries against workman. It was held that
such a job would not make him a workman under Section 2(s). Job of a clerk ordinarily implies stereotype
work without power of control or dignity or initiative or creativeness. Whether same is being performed by an
employee needs to be determined upon a finding as regards the dominant nature of the job performed.
Respondent did not perform any stereotype job and the same involved creativity. The Court give instances
that teachers serving in an educational institution, advertising managers, chemist employed in a sugar mill, gate
sergeant in charge of watch and ward staff in a tannary and a welfare officer in a commercial educational
institution, have all not been held to be workmen.
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In Anand Regional Co-op. Oil Seedsgrowers' Union Ltd. verses Shileshkumar Harshadbhai Shah, it was
held that for determining the question as to whether a person employed in an industry is a workman or not, not
only the nature of the work performed by him but also the terms of the appointment in the job performed are
relevant considerations. Supervision contemplates direction and control. While determining the nature of the
work performed by an employee, the essence of the matter should call for consideration. An undue importance
need not be given for the designation of an employee or the name assigned to the class to which he belongs.
What is needed to be asked is as to what are the primary duties he performs. For the said purpose, it is
necessary to prove that there were some persons working under him whose work was required to be
supervised. In this case the employee being in charge of a section and that too a small one in the quality control
department of an oil seedgrowers' cooperative society, without any authority to initiate departmental
proceedings against the sub-ordinates, was held not a workman under Section 2(s).
In Muir Mills Unit of NTC (U.R) Ltd. verses Sway am Prakash Srivastava , it was held that the respondent 1
having been appointed as a Legal Assistant on probation, and the task he was assigned being those of a
professional, he did not fall within the definition of "workman".
In C. Gupta verses Glaxo-Smithline Pharmaceutical Ltd., it was held that whether a particular employee
comes within the definition of workman has to be decided factually. The nomenclature is really not of any
consequence. While deciding the status of the person, nature of work is really relevant. In the present case,
appellant was appointed as "Industrial Relations Executive" in 1977 and was terminated from service in
September 1982. He claimed to be a workman in view of his work being of skilled, technical nature as per the
amended definition of workman as per Amendment of 1984. The claim was held not sustainable. The duties
undertaken by the appellant overwhelmingly fell within managerial cadre. He had admitted in his evidence that
apart from the advice to the management from time to time, he had other independent functions such as
preparation of draft enquiry reports and conducted domestic enquiries. In his cross-examination he had further
admitted that he had tendered legal advice in all the four branches and factories of the Company at Worli. He
also admitted that on many occasions he had drafted management enquiries and it was his duty to hold
conferences with advocates in relation to the Company's acts. His conditions of service were different from
those provided for the workers of the Company. It was further held that the amendment of 1984 was only
prospective in operation. In order to hold the appellant as a workman in Section 2(s) prevailing on the date of
dismissal should be taken into account.
In National Small Industries Corporation Ltd. verses . verses Lakshminarayanam, (2007) 1 SCC 214, it
was held that Section 18 of the Apprentices Act, 1961 categorically provides that apprentices are not
workers and provision of law with respect to labour shall not apply to or in relation to apprentices. However,
there may be inquiry into whether employee concerned is a "workman" or "apprentice". A person may claim to
be a "workman" despite having been appointed as an apprentice if there is material to establish that.
In D. Krishnan verses . Vellore Co-op. Sugar Mill, (2008) 7 SCC 22, it was held that on the facts and in the
circumstances of the case the absence of overtime slips disproved the claim of the supervisor to be workman.
In New Delhi Assurance Co. Ltd. verses A. Sankaralingam, (2008) 10 SCC 698, it was held that a workman
employed on a part-time basis but under the control and supervision of an employer is a workman in terms of
Section 2(s) of the Act and is entitled to claim the protection of Section 25-F.
Whether following are workman or not
Examples
1. Development Officer: A Development Officer of Life Insurance Corporation of India was held to
be a workman. Keeping in view the nature of duties performed by such officers and the powers vested in
them they cannot be said to be engaged in any administrative or managerial work. Designation or name of
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the post is not a decisive factor. After analyzing the L.I.C. (Staff) Regulations, 1960 it was found that a
Development Officer has no subordinate staff working under him. He is generally placed on par with
subordinate and clerical staff. He has no authority to bind the Life Insurance Corporation of India, It was
observed in this case that maintainability of reference should not be questioned, especially by a public
sector corporations, on mere technical grounds, such as, there is no 'industry' or 'industrial dispute' or the
employee concerned is not a 'workman". It was further held that interpretation of the provision of the
Industrial Disputes Act, 1947 should be liberal and pragmatic so as to advance the object of the Act, "The
words any skilled or unskilled, manual, supervisory, technical or clerical work, are not intended to limit or
narrow the amplitude of the definition of "workman; on the other hand they indicate and emphasize the
broad sweep of the definition which is designed to cover all types of persons employed in an industry,
irrespective of whether they are engaged in skilled work or unskilled work, manual work, supervisory work,
technical work or clerical work, Quite obviously the broad intention is to take in the entire 'labour force' and
exclude the "managerial force'. That, of course, is as it should be," [S.K. Verma verses Mahesh Chandra,.
2. Security Inspector: A Security Inspector deputed at the gate of factory was held to be a workman. The duty
of the Security Inspector at the gate of the factory premises was neither managerial nor supervisory in nature in
the sense in which those terms are understood in industrial law. Ved Prakash Gupta verses M/s. Delton Cables
India (P) Ltd.
3. Clerk of a University: University is an industry and a clerk of the university is a workman [Suresh Chandra
Mathe verses Jiwaji University, Gwalior, (1994) 2 LLJ 462 (MP)].
4. Accountants: Accountants who are merely senior clerks with supervisory duties are workmen [South India
Bank Ltd. verses A.R. Chacko, AIR 1964 SC 1522]. An Accountant of a bank was held not to be employed in a
managerial capacity merely because of the fact that he used to sign salary bills of the staff [Punjab Cooperative
Bank Ltd. verses R.S. Bhatia, AIR 1975 SC 1898]. A Stenographer-cum-Accoutant who was appointed as
Assistant and was designated as Group Leader W7as held to be a workman [Arkal Govind Raj Rao verses Ciba
Geigy of India Ltd. (1985) LLJ 401 (SC)].
5. Assistant Engineer: An Assistant Engineer employed in a sugar factory whose work was mainly technical
in nature namely looking after the work of the workmen under him as well as the concerned machines with no
power to sanction leave to any of the workmen under him or to take disciplinary action against them was held to
be a workman [M/s U. P. State Sugar Corporation Ltd. verses Deputy Labour Commissioner, 1990 Lab 1C 645].
6. Maintenance Engineer: Maintenance Engineer, performing supervisory work and authorised to make
temporary appointments, grant leave, initiate departmental proceedings etc., was held as not workman
[Vimal Kumar Jain verses Labour Court, Kanpur, 1987 Supp. SCC 40].
7. Internal Auditor: Internal Auditor of a company with duties mainly to report or check up but without
any authority to take decisions and bind the company thereby, was held to be a workman [National Engineering
Industries Ltd. verses . Shri Kishan Bhageria, AIR 1988 SC 329]. Clerks in the audit department of a Bank are
workmen [Lloyds Bank Ltd. verses P.N. Gupta, AIR 1967 SC 428].
8. Teachers: Even though an educational institution has to be treated as an "industry" the teachers
employed by educational institutions cannot be called as workmen within the meaning of S.2(s) of the Act.
Imparting of education which is the main function of teachers cannot be considered as skilled or unskilled manual
work or supervisory work or technical work or Clerical work. Imparting of education is in the nature of a mission or a
noble vocation. The clerical work, if any, they may do, is only incidental to their principal work of teaching [A.
Sunder ambal verses Government of Goa, Daman and Dm, AIR 1988 SC 1700]. However, it may be noted that
by 1982 amendment, the word "skilled" in the definition of workman is not qualified by "manual". The Blacks Law
Dictionary defines 'skilled" as a person possessing practical knowledge of art, science or trade and has the ability
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to apply them in a proper and approved manner and with dexterity. A teacher has knowledge and he is skilled in
communicating knowledge and therefore it is argued that a teacher is a 'workman'. In Pramodini Parker
verses Indian Cancer Society (1993) 1 LLJ 447, a teacher in handicrafts in Indian Cancer Society was held
to be a workman.
In Jagdish PrasadSinha verses . Presiding Officer, Labour Court Lucknow, (1992) 2 LLJ 33 (All), the Headmaster
of a school was held not workman. In Management Sacred Heart Convent School verses State of Tamil Nadu,
(1992) 1 LLJ 745 (Mad), the Physical Education Teacher was held not workman. In Sonepat Co-op. Sugar Mills Ltd.
verses Ajit Singh, AIR 2005 SC 1050, teachers serving in an educational institution have not been held to be
workmen.
9. Appraiser engaged by bank: Appraiser engaged by bank purely on commission basis for weighing
and testing gold ornaments offered to be pledged to the bank to secure loans is not workman as there is no
master-servant relationship although he had undertaken to indemnify the bank for any loss [Puri Urban Cooperative Bank v, Madhusudan Sahu, AIR 1992 SC 1452].
10. Sectional Engineer performing supervisory duties: A Sectional Engineer performing supervisory duties
using technical knowledge is not a workman as use of technical knowledge does not change the dominant
nature of his supervisory duty to technical [Ramesh S/o Ramarao Wase verses The Commissioner of Revenue
Division, (1996) ) Lab LJ 55 (Bom.)].
11. Medical or Sales Representatives: In order to fall within the definition, a person must be
employed to do the work of any of the categories, viz. manual, unskilled, technical, operational,
clerical or supervisory. It is not enough that he is not covered by either of the four exceptions to the
definition.
In view of conflict of opinions of different Benches of the Supreme Court, matter referred to a
larger bench in H.R. Adyanthaya verses Sandoz (India) Ltd., AIR 1994 SC 2608: (1994) 5 SCC
737. In this case the Court held that the connotation of the word "skilled" in S.2(s) of I.D. Act in the
context in which it is used, will not include the work of sales promotion employee such as the medical
representatives in the present case. The work has to be construed ejusdem generis and thus construed,
would mean skilled work whether manual or non-manual, which is of the genre of the other types of
work mentioned in the definition. The work of promotion of sales of the product or services of the
establishment is distinct from and independent of the types of work covered by the said definition. As
such the medical representatives are not skilled workers; nor are they "technical" or "operational"
workers. Thus their work is not covered by any type of works mentioned in the main body of the
definition. As regards the "technical" nature of their work it has been expressly rejected by the
Supreme Court in Burmah Shell case.
However, on and from 6.3.1976 by virtue of Sales Promotion Employees (Conditions of Service)
Act, 1976 the provisions of ID Act became applicable to the medical representatives depending upon
their wages before 6-5-1987 and without the limitation on their wages w.e.f. 6-5-1987 and upon the
capacity in which they were employed or engaged. Thus, according to the amendment by the Act 48
of 1986 w.e.f. 6-5-1987 in the Sales Promotion Employees (Conditions of Service) Act, 1976 all
sales and medical representatives are workmen except those employed in a supervisory capacity
drawing wages exceeding Rs. 1,600 per mensum and those employed or engaged in managerial or
administrative capacity.
12. Priest: A priest is not a workman as he cannot be equated with a mere wage earner and his
services cannot be treated as manual or clerical etc. [Kesava Bhatt verses Shree Ram Ambulam
Trust (1990) 1 Lab. LJ 192 (Ker)].
13. Artist: An artist engaged in the production of a drama or in theater management or to
participate in a play can by no stretch of imagination be termed as "workman" because he does not
indulge in any manual, unskilled, or technical, operational or clerical works, though he may be skilled,
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it is not such a work which can be read ejusdem generis along with other kinds of work mentioned in
the definition given under S.2(s) of the I.D. Act. The work that the respondent artists perform is in the
nature of a creative art and their work is neither subject to an order required from the Art Director nor
from any of the artists. In performing their work, they have to bring to their work, their artistic ability,
talent and a sense of perception for the purpose of production of drama involving in the course of
such work the application of correct technique and the selection of the cast, the play, the manner of
presentation, the light-and-shade effects and so on. [Bharat Bhawan Trust verses Bharat Bhawan
Artists ' Association.
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14, Commission Agents/Deposit Collectors of Banks: Commission Agents/ Deposit Collectors of banks,
although were not regular employees, held, nonetheless covered by the definition of workman. It was further held
that relationship of master and servant did exist between the bank and such workmen. [Indian Bank Association
Workmen of Syndicate Bank,
The following have been held to be workman:
1. Dismissed or discharged workman [S. 2 (s)].
2. Retrenched workman [Cawnpur Tannery Ltd. verses S. Guha,
3. Ex-employees [Bennett, Coleman & Co. verses P.P. Das Gupta, (1969) 2 SCC
1]4. Manager of a hotel who had to write letters, file correspondence, enter
- cash book, etc. [Indian Iron and Steel Co. Ltd. verses Workmen,
5. Clerk of a university [Suresh Chandra Mathe verses Jiwaji University, Gwalior, (1994)
6. Mails employed by mill for looking after gardens attached with officers' banglows which are situated in
the Mill's colony.
7. Employees of municipality [Howrah Municipality verses Mansa Das Dev, (1965) 2 LLJ 135].
8. Depot Superintendents whose duties were clerical [Burmah Shell Oil Storage and Distributing Co.
India Ltd. verses Management Staff Association,
9. Assistant Medical Officer, Class II in the Railway as he performs technical work [Dr. Surender Kumar verses
Union of India, (1986) Lab 1C 1516 (All) (DB)].
10. Internal Auditor is a workman as his duties are mainly reporting and checking on behalf of the
management and the person doing such work is not a supervisor [National Engineering Industries Ltd.
verses Shri Kishan Bhageria and Others, (1988) 1 Lab LJ 363 (SC)].
11. A Clerk in a bank is a workman [S. Rajendran verses Asst. General Manager, State Bank of
Travancore, (1995) 1 LLJ 650 (Kerala)].
12. Deposit Collectors of banks are workmen [Indian Bank Association verses
Workmen of Syndicate Bank, (The following have been held to be not workman:
1. Assistant Secretaries of Rashtriya Mill Mazdoor Sangh as the word "skilled" used in S.2(7) of the Act
calls for more attributes of manual dexterity than intellectual dexterity Further the Assistant
Secretaries of the union are not carrying out their duty for hire or reward. [Dattatraya Gopal Paranjape
verses Rashtriya Mill Mazdoor Sangh, (1989) 1 Lab LJ 61 (SC)].
2. A practicing lawyer engaged by a company on retainer basis to look after the interest of the company
before the Labour Court [Indian Sulphacid Industries Ltd. Labour Court, Rohtak,
3. Senior Assistant Editor of a newspaper [V.N.N. Sinha verses Bihar Journals Ltd., AIR 1954 Pat 1].
4. Head Clerk in Rajya Transport Authority [Bihar State Road Transport Corporation verses State of Bihar
5. Car driver engaged by Bank Manager, who gets car allowance from the Bank [Punjab National Bank
verses Ghulam Dastgir, (1978) 2 SCC 358]. The decision is limited to the facts of this case.
6. A shop manager, although incidentally doing some clerical work [S.K. Maini verses Carona Sahu Co.,
7. A person working without any remuneration.
8. A pilot with Indian Air Force [exception (i) to S.2(s)]
9. A Jail Superintendent [exception (ii) to S.2(s)].
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3
Industrial Dispute
Definition of Industrial Dispute

According to Section 2(k) of the Industrial Disputes Act, 1947 "industrial dispute" means any dispute or
difference between employers and employers or between employers and workmen, or between workmen
and workmen, which is connected with the employment or non-employment or the terms of employment or
with the conditions of labour, of any person. From the definition it is clear that the following elements should be
present to constitute an industrial dispute:
(1) There must be a dispute or difference.
(2) The dispute or difference must be between employers and employers, or between employers and
workmen or between workmen and workmen.
(3) The dispute or difference must be connected with the employment or with the conditions of labour of
any person. Analysis of Definition of Industrial Dispute
The definition of industrial dispute is in three parts. The first part refers to the factum of a real and substantial
dispute; the second part, to the parties to the dispute; and the third, to the subject-matter of the dispute. The
adjective 'industrial' relates the dispute to an industry as defined in the Act.
1. Factum of real and substantial dispute: There must be a real dispute. It should not be vague. The mere
apprehension of dispute is not sufficient. The Act has not defined what is 'dispute'. The ordinary dictionary
meaning of the word 'dispute' means a difference. A demand made which is not met gives rise to a
difference. For a dispute to be industrial dispute it is necessary that a demand must be first raised on
management and rejected by it. The term 'industrial dispute' connotes a real and substantial difference having
some element of persistency and continuity till resolved. Written demand is not necessary for bringing into
existence an 'industrial dispute'. In Feeders Lloyd Corporation Ltd. verses Lt. Governor of Delhi, AIR 1970 Delhi 60,
it was held that where the demand is raised for the first time before the Conciliation Officer and he in turn
communicated to the management which rejected the same was held not sufficient to constitute industrial
dispute within the meaning of the Act.
2. Parties to the dispute: The dispute must be between (a) employers and employers, (b) employers and
workmen, or (c) workmen and workmen. In Workman of ISI verses . ISI it was held that industrial dispute is not
restricted to dispute between employer and a recognised majority union. It also means a difference between
employer and workmen including a minority union.
3. Subject-matter of the dispute: The dispute must relate to the matters provided in the definition. It
must be connected with the employment or non-employment or the terms of the employment or with the
conditions of labour, of any person.
Dispute regarding confirmation of workmen officiating in higher grade involves 'classification by grades' specified
in entry 7 of third schedule and is an industrial dispute' which Tribunal constituted under S. 7-A is bound to
adjudicate [Workmen verses . Hindustan Lever Limited,
In Workmen of Nilgiri Corporation Marketing Society verses State of Tamil Nadu, it was held that nonemployment in the context of employment previously existing is different from non-employment referable to
contemplated employment. Except proof of entitlement to employment such as provision in the certified
standing order or memorandum of settlement requiring employer to employ certain persons, disputes regarding
refusal to employ persons disregarding promise to give employment is not connected with employment or nonemployment within the meaning of S. 2(k).
All disputes relating to the matters specified in the second schedule and in the third schedule constitute
'industrial dispute'. The Second Schedule
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Matters within the jurisdiction of Labour Courts
\. The propriety or legality of an order passed by an employer under the standing orders;
2. The application and interpretation of standing orders;
3. Discharge or dismissal of workmen including reinstatement of, or grant of relief to, workmen wrongfully
dismissed;
4. Withdrawal of any customary concession or privilege;
5. Illegality or otherwise of a strike or lockout; and
6. All matters other than those specified in the Third Schedule. The Third Schedule
Matters within the jurisdiction of Industrial Tribunals
1. Wages, including the period and mode of payment;
2. Compensatory and other allowances;
3. Hours of work and rest intervals;
4. Leave with wages and holidays;
5. Bonus, profit sharing, provident fund and gratuity;
6. Shift working otherwise than in accordance with standing orders;
7. Classification by grades;
8. Rules of discipline;
9. Rationalization;
10. Retrenchment of workmen and closure of establishment; and
11. Any other matter that may be prescribed.
Dispute regarding confirmation of workmen officiating in higher grade involves 'classification by grades' specified
in Entry 7 of Third Schedule and is an 'industrial dispute' which Tribunal Constituted under S. 7-A is bound to
adjudicate [Workmen verses Hindustan Lever Limited.
Dispute raised by workmen demanding abolition of contract labour in a concern is an industrial dispute.
Whenever a dispute is raised by workmen in regard to the employment of contract labour by any employer it
would be necessary tor the tribunal to examine the merits of the dispute apart from the general consideration
that contract labour should not be encouraged, and that in a given case the decision should rest not merely
on theoretical or abstract objections to contract labour but also on the terms and conditions of which
contract labour is employed and the grievance made by the employees in respect thereof. [Standard Refining
Company of India Ltd. verses . Their Workmen, (1960) SC 948 j. Industrial tribunal can order abolition of
contract labour if the facts justify' [National Iron and Steel Co. Ltd. verses State of West Bengal, AIR 1967 SC
1206]. Where the work was of permanent nature and part and parcel of the manufacturing process of the
goods and the labour engaged by the contractor was deprived of the legal facilities enjoyed by other workers
under the statute, the employment of contract labour was an unfair labour practice [Shibu Metal Works
verses Workmen, (1966) 1 LLJ 717],
Meaning and Scope of words 'any person': In Workman of Dimakuchi Tea Estate verses Management
of Dimakuchi Tea Estate (AIR 1958 SC 353) it was held that the expression ""any person" occurring in the
third part of the definition of industrial dispute as given in S.2(k) cannot mean any body or everybody in
this wide world. The expression, it was held, means that the person may not be a workman but he may be
someone in whose employment, terms of employment or conditions of labour the workmen as a class have
a direct or substantial interest with whom they have, under the scheme of the Act, community of interest.
Thus dispute need not be in respect of a workman but community of interest in the workman is necessary for the
dispute to become an industrial dispute.
The above interpretation of the expression "any person'' in Workmen of Dimakuchi Tea State verses
Management of Dimakuchi Tea Estate was followed by the Supreme Court in the subsequent cases also,
namely Workmen verses Dahingeapara Tea Estate (1958 LLJ 498): (AIR 1958 SC 1026); Standard Vacuum
Refining Co. Ltd. verses Workmen (1960-11 LLJ 223) : (1960 SCR 466); All India Reserve Bank Employees
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Association verses Reserve Bank of India (1965-11 LLJ 175) : [I960 (!) SCR 25] and Workmen verses
Greaves Cotton & Co. Lid.
In Bangaigaon Refinery and Petrochemicals Ltd, verses Satnijuddin Ahmed, (2001) SCC 557, it was held
that the words "any person" does not include a person who was offered appointment but was not allowed
to join the service by not accepting his joining report. Existence of employer-employee relationship is
necessary.
In Mukand Ltd. verses . Mukand Staff and Officers' Association (2004) 10 SCC 460 : AIR 2004 SC 3905, it
was held that the word "person'' in S. 2(k) does not include non-workman employee.
Dispute regarding confirmation of workmen officiating in higher grade is an industrial dispute: In
Workmen Employed by Hindustan Lever Ltd verses Hindustan Lever Ltd., it was held that a dispute between
workmen and employer regarding confirmation of workmen officiating in higher grade is an industrial dispute.
Such dispute is 'connected with the terms of employment' relating to "classification of workmen" which
employer is bound under the Standing Orders Act to provide for in the certified standing orders.
Industrial dispute can cover dispute of employer with those still not in his employment: A dispute
raised by the employer's workmen in regard to the non-employment of others who may not be his workmen
at the material time, is an industrial dispute [Kays Construction Co. (?) Ltd. verses Workmen
Industrial dispute will subsist in spite of closure or take over of industry: Where the dispute is over a
claim to benefit by way of bonus for work done in the past, it would be the duty of the Tribunal to complete the
adjudication and make its award [U.P. Electric Sypply Co. Ltd. verses . Workman.
Individual dispute and industrial dispute: In Central Provinces Transport Services Ltd. verses
Raghunaih Gopal Patwardhan, (1957) LLJ 27 (SC), it was held that individual dispute may become an industrial
dispute if it is taken up by a State Union or a number of workmen.
In Newspaper Ltd. verses State Industrial Tribunal U.P. and Others, the Supreme Court held : k*A dispute
between employer and a single workman does not fall within the definition of industrial dispute/' but if the
"workman as a body or a considerable section of them make a common cause with the individual
workman" then such a dispute would be an industrial dispute; majority support is not essential. The essential
requirement in such a case is that there must be community of interest and cause of the aggrieved workman is
supported by substantial or appreciable number of workmen who in turn are interested in their welfare. In
Western India Match Cu. Ltd verses Western India Match Co. Workers' Union, (1970) 1 SCC 225, it was held
that the only condition for an individual dispute turning into an industrial dispute is the necessity of community
of interest, The community of interest must exist at the date of reference and the concerned workman need not
be a member of the Union. In Working Journalist of Hindu, Madras verses The Hindu, Madras, (1960) 1 LLJ 228 it
was held that once a dispute has been referred it will not cease to be an industrial dispute because the workmen
withdraw their support afterwards. In Indian Cable Co. Ltd. verses Its Workmen, (1962) 1 LLJ 409 (SC), it was
held that individual dispute per se is not an industrial dispute but it may become one if it has the backing of
substantial number of workmen of the establishment or of union. Similarly in Binny Limited . Their Workmen,
AIR 1972 SC 1975, it was held that where, an industrial dispute existed at the time of making order of reference
this dispute does not cease to be so merely because dispute relating to only one employee is left over and that
the union which raised the dispute chooses not to represent a particular employee.
In Jadhav J.H. verses Forbes Gobak Ltd., (2005) 3 SCC 202, it was held that a dispute relating to a single
workman may be an industrial dispute must either be espoused by the union of workman or a number of
workmen. 'The union" merely indicates the union to which the employee belongs even though it may be a
union of minority of employees in the establishment, or the union of another establishment belonging to the
same industry. In the latter case it would be open to that union to take up cause of the workmen. In this case
the appellant employee raised dispute as to denial of promotion. The objection in this case was that the
union espousing the cause of workman was not the majority union but that objection was rightly rejected
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by the Tribunal and wrongly accepted by the High Court. The Supreme Court held that the High Court should
not have upset the finding of the Tribunal without holding that the conclusion was irrational or perverse.
Industrial dispute can be raised in respect of non-workmen [Workmen verses Greaves Cotton & Co. Ltd,
(1971) 2 SCC 658].
Following have been held to be industrial dispute:
1. When closure is a pretence.
2. Dispute on lock-out in disguise of closure.
3. Dispute regarding contract labour.
4. Demand for modification of standing orders.
5. Alteration of conditions of service of employees of a co-operative society,
6. Dispute between workmen and employer regarding confirmation of workmen officiating in a higher grade.
The Industrial Dispute (Amendment) Act, 1965 has inserted a new Section 2-A which is a follows:
"Where any employer discharges, dismisses, retrenches or otherwise terminates the services of an
individual workman any dispute or difference between the workman and his employer connected with or arising
out of such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute
notwithstanding that no other workman nor any union of workmen is party to the dispute."
Thus an individual dispute concerning discharge, dismissal, retrenchment or termination of an individual workman
is deemed to be an industrial dispute. But as regards other disputes connected with the employment, nonemployment, terms of employment or conditions of labour the aggrieved workman has to take the support of the
Union or his fellow workman to espouse his cause. Section 2-A is of limited application. It does not declare all
individual disputes to be an industrial dispute. In Algu Ram verses . State of Punjab (1977) If L.L.J. 207 (Punjab &
Haryana), it was held that a reference of an individual dispute under S.2-A would be valid even jf it is not espoused by the
union of workmen and such reference would not take the dispute out of the purview of S.2-A. Jurisdiction of Civil
Court impliedly barred
In Jitendra Nath Biswas verses . Empire of India and Ceylone Tea Co,, (1989) 3 SCC 582 it was held that the
scheme of the Industrial Disputes Act clearly excludes the jurisdiction of the Civil Court by implication in respect of
remedies which are available under this Act and for which a complete procedure and machinery has been provided in
this Act.
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4
Lay-off and Retrenchment
LAY-OFF
Lay-off means to discontinue work or activity; to dismiss or discharge temporarily. The employer-employee relation
does not come to an end but is merely suspended during the period of lay-off. Definition and Essentials of Lay-off
Section 2 (kkk) of the Industrial Disputes Act, 1947 defines "lay-off" as under:
"Lay-off" (with its grammatical variations and cognate expressions) means the failure, refusal or
inability of an employer on account of shortage of coal, power or raw materials or the accumulation of
stocks or the breakdown of machinery or natural calamity or for any other connected reason to give
employment to a workman whose name is borne on the muster rolls of his industrial establishment
and who has not been retrenched;
Explanation: Every workman whose name is borne on the muster rolls of the industrial establishment
and who presents himself for work at the establishment at the time appointed for the purpose during
normal working hours on any day and is not given employment by the employer within two hours of his
so presenting himself shall be deemed to have been laid off for that day within the meaning of this
clause:
Provided that if the workman, instead of being given employment at the commencement of any shift for
any day is asked to present himself, for the purpose during the second half of the shift for the day and
is given employment then, he shall be deemed to have been laid off for one half of that day:
Provided further that if he is not given any such employment even after so presenting himself, he shall
not be deemed to have been laid-off for the second half of the shift for the day and shall be entitled to
full basic wages and dearness allowance for that part of the day. Note: The words in italics in cl. (kkk)
substituted by Act 46 of 1982 vide s. 2(f) for or for any other reason,
Lay-off means the failure, refusal or inability of the employer on account of contingencies mentioned in clause (kkk) to
give employment to a workman whose name is borne on the muster rolls of his establishment. It is merely a fact of
temporary unemployment of the workman in the work of the industrial establishment. Thus the following are the
essential elements of " lay-off":
(1) The employer fails or refuses or unable to provide employment for reasons beyond his control.
(2) The failure or refusal or inability to employ a workman must be due to (a) shortage of coal, power, or raw materials,
or (b) the accumulation of stocks, or (c) the breakdown of machinery, or (d) natural calamity or (e) for any other
connected reason, The expression for "any other reason " appearing in the definition (before 1982 amendment) is to
be construed ejusdem generis. Any other reason must be of the kind, as the other reasons stated in the definition, e.g.
reasons beyond the control of the employer. This has been made more clear by substituting the words "any other
connected reason" for "any other reason ". The amendment has also added "natural calaminity" as one of the
reason for lay-off. In Workmen verses . Devan Tea Estate, AIR 1964 SC 1458, it was held that other causes beyond
control should be similar to the cause that have preceded. It does not include financial stringency or stoppage of
financial assistance. In Cachar Chah Shramik Union, Silchar, Assam verses Management of Tea Estate of Cachar, AIR
1966 SC 987, it was held that when there was a sudden slump in the price of tea in the World Market which continued
for nearly 18 months, then it is a reason beyond the control of the management.
In S.A.E. Mazdoor Union verses Labour Commissioner, Indore and Others, (2002) 1 LLJ 791 (MP), it was held that the
Labour Commissioner can objectively consider the case of granting permission to lay-off the workmen on the
ground of accumulation of stock.
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(3) The name of the workman must be borne on the muster rolls of the industrial establishment.
(4) The workman must not have been retrenched.
(5) The explanation attached to the sub-section provides that every workman whose name is borne on the
muster rolls of the industrial establishment and who presents himself for work at commencement at he time
appointed for the purpose during normal working hours on any day and is not given employment within two hours of
his so presenting himself shall be deemed to have been laid-off for that day within the meaning of S? KKK).
If the workman, instead of being given employment at the commencement of any shift for any day is asked to
present himself for the purpose during the second half of the shift for the day and is given employment then, he shall
be deemed to have been laid-off only for one-half of that day.
If he is not given any such employment even after so presented himself, he shall not be deemed to have been
laid-off for the second half of the shift for the day and shall be entitled to full basic wages and dearness allowance for
that part of the day.
The clause (KKK) was added in Section 2 by an amendment to the Act in 1953. At the same time Chapter VA (Section
25-A to 25-J) was introduced in the Act to provide for lay-off and retrenchment compensation.
According to section 25-A of the Act the provisions relating to lay-off, contained in Sections 25-C to 25-E, shall not be
applicable (a) to industrial establishments in which less than fifty workmen on an average per working day have
been employed in the preceding calender month; or (b) to industrial establishments which are of seasonal
character or in which work is performed only intermittently.
Thus the Industrial Disputes Act has modified the common law right of termination of service to one of
the temporary unemployment of workman in the work of the industrial establishment. In the M/s Firestone and
Rubber Co. of India (P) Ltd. verses The Firestone Tyre and Rubber Co.., it was held that there is no provision in the
I.D. Act, 1947 which gives the power of lay-off to an employer. Therefore, this right must be located either in the
standing orders or in the contract of employment. In the absence of this right in the standing orders or in the
contract of employment, the employer must pay wages to the laid-off workman. Right of Workmen laid off for
Compensation
Section 25-C of Chapter VA of the Act entitles a workman to get compensation from the employer for the period
he is laid off. The compensation payable shall be for all days during which he is laid off, except for such weekly
holidays as may intervene. The compensation will be equal to the 50% of the total of the basic wages and
clearness allowance that would have been payable to the workman had he not been so laid off. The section is
reproduced below:
"Whenever a workman (other than a badli workman or a casual workman) whose name Is borne on
the muster rolls of an industrial establishment and who has completed not less than one year of continuous
service under an employer is laid off, whether continuously or intermittently, he shall be paid by the employer for all
days during which he is so laid off, except for such weekly holidays as may intervene, compensation which shall be
equal to fifty percent of the total of the basic wages and dearness allowance that would have been payable to him
had he not been so laid off Provided that if during any period of twelve months, a workman is so laid off for more
than forty-five days, no such compensation shall be pay able in respect of period of the lay-off after the expiry of the
first forty-five days, if there is an agreement to that effect between the workman and the employer:
Provided further that it shall be lawful for the employer in any case falling within the forgoing provisions to
retrench the workman in accordance with the provisions in Section 25-F at any time after the expiry of first fortyfive days of lay-off and when he does so, any compensation paid to the workman for having laid-off during
the preceding twelve months may be set-off against the compensation payable for retrenchment. Explanation
"Badli workman" means a workman who is employed in an industrial establishment in the pi ace of another
workman whose name is borne on the muster rolls of the establishment but shall cease to be regarded as such for
the purposes of the section, if he has completed one year of continuous service in the establishment"
Thus a workman must fulfil the following conditions for claiming lay-off compensation:
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(1) His name must be borne on the muster roils of an industrial establishment.
(2) He must have completed at least one year's continuous service as defined in section 25-B.
(3) He must not be a badli or casual workman.
The right of a workman to claim lay-off compensation is subject to the following limitations:
(1) If during any period of twelve months, a workman is so laid off for more than forty-five days, no such
compensation shall be payable in respect of any period of the lay-off after the expirty of the first forty-five
days, if there is an agreement to that effect between the workman and the employer.
(2) It shall be lawful for the employer in any case falling within the foregoing provisions to retrench the
workman in accordance with the provisions contained in Section 25-F at any time after the expiry of the first
forty-five days of the lay-off and when he does so, any compensation paid to the workman for having been
laid-off during the preceding twelve months may be set off against the compensation payable for
retrenchment. Section 25-C does not recognize the inherent right of the employer to declare lay-off for reasons
which he may regard as sufficient or satisfactory in that behalf. When the laying off of the workmen is referred
to in section 25-C, it is the laying- off as defined in Section 2 (kkk), and so, workmen who can claim the benefit
of section 25-C must be workmen who are laid off and laid off for reasons contemplated by Section 2 (kkk).
[Workman verses Dewan Tea Estate,]
It would not open to the Tribunal to enquire whether the employer could have avoided the lay-off if he had
been more diligent, more careful, and more farsighted. If the lay-off is mala fide in the sense that the
employer has deliberately and maliciously brought about a situation where lay-off became necessary, then it
would not be lay-off which is justified under Section 2 (kkk) and the .relief provided to the laid off workmen under
Section 25-C would not be the only relief to which they are entitled. If the lay-off has been declared in order to
victimize the workmen or for some other ulterior purpose, the position would be same. It would not be lay-off as
contemplated in Section 2 (kkk). [Tatanagar Foundry Co, Ltd. verses Workmen, AIR 1962 SCI 533].
Provisions applicable to lay-off cannot be made applicable to lockout. [Management of Kairhetta
Estate verses Raja Manikam,].
Payment of compensation is not a condition precedent to lay-off and compensation cannot be
awarded in advance of actual lay-off, [K.T. Rolling Mills verses M.R. Mehar, (1962) 2 LLJ 667 (Bom,)].
By virtue of Section 25-J the Jay-eff compensation provided by the statute cannot be refused by
reference to the standing orders [R.B. Bansilal Abirchand Mills verses Labour Court, Badli- workman. When a
workman whose name is actually borne on the muster rolls is absent, someone else is employed in his place on
the days the workman remains absent, then such other person is called a badli workman. Thus a badli
workman is one whose name is not borne on the muster rolls of the establishment. Any such person ceases to
be a badli workman after completion of one year's continuous service. Therefore, if the name of a workman,
even if he is a 'badli workman' is found on the muster rolls, he is entitled to lay-off compensation [ Vijaya Kumar
Mills verses Labour Court, (1960) 2 LLJ (Mad.)].
In Bank of India and Another verse. Tarun Kumar Biswas and Others, the respondents were badli workmen.
They sought absorption under a scheme prepared by the appellant bank. They had not completed 240 days of badli
service. It was held that onus is on the employee to show that he had worked for 240 days. Therefore, the
application for regularization of their service was untenable.
Definition of Continuous Service (S. 25-B)
For the purposes of lay-off and retrenchment, the term 'continuous service' is defined in Section 25-B.
According to the section 25-B(l) a workman is said to be in continuous service for a period if he is, for that period, in
uninterrupted service. Interruption on account of sickness or authorised leave or an accident or a strike which is
not illegal, or a lock-out or a cessation of work which is not due to the fault on the part of the workman, is
not interruption within the meaning of this section and the service shall be deemed to be continuous.
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Sub-section (2) defines continuous service for one year and for six months. Even though a workman is not in
continuous service for a period of one year or six months, he is nevertheless deemed to be in continuous service
under an employer
(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with
reference to which calculation is to be made, has actually worked under the employer for not less than: (1) 190
days in the case of workman employed below ground in a mine; and
(2) 240 days, in any other case.
(b) for a period of six months, if the workman, during a period of six calender months preceding the date with
reference to which calculation is to be made has actually worked under the employer for not less than: (1) 95
days, in the case of a workman employed below ground in a mine; and
(2) 120 days, in any other case.
According to the Explanation to this section for the purpose of calculating the number of days on which a workman
has actually worked under an employer, it is necessary to take into account the days on which
(1) he has been laid off under an agreement or as permitted by standing orders made under the Industrial
Employment (Standing Orders) Act, 1946 (20 of 1946) or under this Act or under any other law applicable to the
industrial establishment;
(2) he has been on leave with full wages, earned in the previous year;
(3) he has been absent due to temporary disablement caused by accident arising out of and in the course of his
employment; and
(4) in the case of a female, she has been on maternity leave; so however, that the total period of such maternity
leave does not exceed twelve weeks.
In Mohan Lal verses Bharat Electronics Ltd., , it was held that Section 25B(2) comprehends a situation
where a workman is not in employment for a period of 12 calendar months, but has rendered service for a
period of 240 days within the period of 12 calendar months commencing and counting backwards from the
relevant date i.e. the date of retrenchment. He would be deemed to be in continuous service for a period of
one year for the purpose of Section 25B and Chapter VA of the Industrial Disputes Act, 1947.
In Workmen of American Express International Banking Corporation verses Management of American
Express International Banking Corporation, (1985) II LLJ 539 (SC), it was held that for the purpose of
determining continuous service a workman must have actually worked for 190 or 240 days as the case may be.
In R.M Yellati verses . Asstt. Executive Engineer, it was reiterated that burden of proof that workman
worked for 240 days continuous service in a given year lies on the workman. It was further held that mere
affidavits or self-serving statements made by claimant workman will not suffice in the matter of discharge of
the burden placed by law on the workman to prove that he had worked for 240 days in a given year. In most
cases, the claimant workman can only call upon the employer to produce before the court the nominal
muster roll for the given period, the letter of appointment or termination, if any, the wage register, the
attendance register, etc. Drawing of adverse inference ultimately would depend thereafter on the facts of each
case.
Similarly in Sundernagar Distt. Panchayat verses Gangaben Laljibhai, it was again held that the burden of
proof lies on the workman to show that he had worked continuously for 240 days for the preceding one year
and it is for the workman to adduce evidence apart from examining himself to prove the factum of being in
employment of the employer.
In Haryana Urban Development Authority verses Om Pal, it was held that employment of daily
wager/casual employee in different establishments, even under the same employer or controlling authority
would not amount to his being in "continuous service".
Similar was the decision in State of Haryana verses Ramesh Kumar
Duty of an Employer to maintain Muster Rolls of Workmen (S. 25-D)
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Section 25-D of the Act imposes a duty upon the employer to maintain a muster roll for the purpose of Chapter VA, i.e.,
for lay-off and retrenchment. It says "notwithstanding that workmen in any establishment have been laid off it
shall be the duty of every employer to maintain for the purpose of this chapter a muster roll and to provide for the
making of entries therein by workmen who may present themselves for work at the establishment at the
appointed time during normal working hours." This duty is mandatory and the noncompliance of it will debar the
employer to take advantage of Section 25-E (ii) of the Act. Workmen not entitled to compensation in certain
cases (S. 25-E)
Section 25-E provides that a laid-off workman shall not be entitled to compensation:
(1) if he refuses to accept any alternative employment in the same establishment from which he has been laid-off or
in any other establishment belonging to the same employer situate in the town or village or situate within a
radius of five miles from the establishment to which he belongs, if, in the opinion of the employer, such
alternative employment does not call for any special skill or previous experience and can be done by the workman,
provided that the wages which would normally have been paid to the workman are offered for the alternative
employment also;
(2) if he does not present himself for work at the establishment at the appointed time during normal working hours
at least once a day;
(3) if such laying-off is due to strike or slowing down of production on the part of the workman in another part
of the establishment. (See ACC case).
Meaning of alternative employment: The expression "any alternative employment" in Section 25-E of the Act
must mean any other similar or like or equivalent employment to the original job. It does not mean that a
variety of jobs be offered; offer of one alternative job must be considered enough but that job must be like or
similar to the original job from which the workmen concerned were laid-off. The expression, "can be done by the
workman" is, however, significant in conditions of Section 25-E and means not only physical capability but also
its acceptability on the part of the workman. Offer of the job of coolie to a skilled
workman cannot amount to the offer of an alternative job. Industrial Employees' Union, Kanpur verses J.K. Cotton
Spinning and Weaving Mills Company
Application of Sections 25-C to Section 25-E (S. 25-A)
According to S. 25-A (1) Sections 25-C to 25-E inclusive shall not apply to industrial establishment to which
Chapter VB (Chapter on "Special Provisions Relating to Lay-off, Retrenchment and Closure in Certain
Establishments" Sections 25-K to 25-S) applies, or:
(a) to industrial establishments in which less than fifty workmen on an average per working day have been
employed in the preceding calendar month; or
(b) to industrial establishments which are of a seasonal character or in which work is performed only
intermittently.
Section 25-A(2) provides that if a question arises whether an industrial establishment is of a seasonal
character or whether work is performed therein only intermittently, the decision of the appropriate
Government thereon shall be final. The Explanation provides that in this Section and in Sections 25-C, 25-D
and 25-E "industrial establishment" means a factory, a mine a or a plantation as defined in the Factories Act,
Mines Act and Plantation Labour Act respectively.
Effect of Laws inconsistent with Chapter VA of the Act (S. 25-J)
(1) The provisions of this Chapter (Chapter VA of the Act) shall have effect notwithstanding anything inconsistent
therewith contained in any other law including standing orders made under the Industrial Employment (Standing Orders) .
Provided that where under the provisions of any other Act or rules, orders or notifications issued there under or
under any standing orders or under any award, contract or service or otherwise, a workman is entitled to benefits in
respect of any matter which are more favorable to him than those to which he would be entitled under this Act, the
workman shall continue to be entitled to the more favorable benefits in respect of that matter, notwithstanding that
he receives benefits in respect of other matter under this Act.
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(2) The provision of Chapter V-A shall not effect the provisions of any other law for the time being in force in any
State in so far as that law provides for settlement of industrial disputes, but the rights and liabilities of employers and
workmen in so far as they relate to lay-off and retrenchment shall be determined in accordance with the provisions
of Chapter V-A of the Act.
Thus by virtue of S. 25-J the lay-off compensation provided by the statute cannot be refused by reference to the
standing orders. Special provisions relating to lay-off in certain establishments
The Industrial Disputes (Amendment) Act, 1976 inserted Chapter V-B dealing with special provisions relating to
lay-off, retrenchment and closure in certain establishments. The new sections introduced by this amendment are S.
25-K to S. 25-S. The provisions of this chapter apply to industrial establishments (not being as establishment of a
seasonal character or in which the work is performed intermittently) in which not less than one hundred
workmen were employed on an average per working day for the preceding twelve months.
Section 25-M deals with prohibition of lay-off. It is reproduced below:"25-M Prohibition of lay-off: (I) No workman (other than a badli workman or a casual workman) whose name is
borne on the muster-rolls of an industrial establishment to which this Chapter applies shall be laid off by his employer
except with the prior permission of the appropriate Government or such authority as may be specified by that
Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority),
obtained on an application made in this behalf unless such lay-off is due to shortage of power or to natural calamity,
and in the case of a mine, such lay-off is due also to fire, flood, excess of inflammable gas or explosion.
(2) An application for permission under sub-section (I) shall be made by the employer in the prescribed manner
stating clearly the reasons for the intended lay-off and a copy of such application shall also be served
simultaneously on the workmen concerned in the prescribed manner.
(3) Where the workmen (other than badli workmen or casual workmen) of an industrial establishment, being a
mine, have been laid-off under sub-section (1) for reasons of fire, flood or excess of inflammable gas or explosion,
the employer, in relation to such establishment, shall, within a period of thirty days from the date of commencement
of such lay-off, apply, in the prescribed manner, to the appropriate Government or the specified authority for
permission to continue the lay-off
(4) Where an application for permission under sub-section (I) or sub-section (3) has been made, the
appropriate government or the specified authority, after making such enquiry as it thinks fit and after giving a
reasonable opportunity of being heard to the employer, the workmen concerned and the per sons interested in such
lay-off, may, having regard to the genuineness and adequacy of the reasons for such lay-off, the interest of the
workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to
grant such permission and a copy of such order shall be communicated to the employer and the workmen,
(5) Where an application for permission under sub-section (I) or sub-section (3) has been made and the
appropriate Government or the specified authority does not communicate the order granting or refusing to
grant permission to the employer within a period of sixty days from the date on which such application is made,
the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty
days.
(6) An order of the appropriate Government or the specified authority granting or refusing to grant permission
shall, subject to the provisions of sub-section (7), be final and binding on all the parties concerned and shall remain
in force for one year from the date of such order.
(7) The appropriate Government or the specified authority may, either on its own motion or on the
application made by the employer or any workman, review its order granting or refusing to grant permission
under sub-section (4) or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for
adjudication:
Provided that where a reference has been made to a Tribunal under this subsection, it shall pass an award
within a period of thirty days from the date of such reference.
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(8) Where no application for permission under sub-section (1) is made or where no application for
permission under sub-section (3) is made within the period specified therein, or where the permission for any layoff has been refused, such lay-off shall be deemed to be illegal from the date on which the workmen had been laidoff and the workmen shall be entitled to all the benefits under any law for the time being in force as if they had
not been laid-off. .
(9) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate
Government may, if it is satisfied that owing to such exceptional circumstances as accident in the establishment or
death of the employer or the tike, it is necessary so to do, by order, direct that (he provisions of subsection (1), or, as
the case may be, sub-section (3) shall not apply in relation to such establishment for such period as may be specified
in the order].
(10) The provisions of Section 25-C (other than the second proviso thereto) shall apply to cases of lay-off referred
to in this section.
Explanation. For the purposes of (his section, a workman shall not be deemed to be laid off by an employer if such
employer offers any alternative employment (which in the opinion of the employer does not call for any special skill or
previous experience and can he done by the workman) in the same establishment from which he has been laid off or in any
other establishment belonging to the same employer, situate in the same town or village or situate within such
distance from the establishment to which he belongs that the transfer will not involve undue hardship to the workman
having regard to the facts and circumstances of his case, provided that the wages which would normally have been paid
to the workmen are offered for the alternative appointment also. "
RETRENCHMENT
Retrenchment means in ordinary parlance that the business itself is being continued but that a portion of the
staffer the labour force is discharged as surplus age. Therefore, termination of services of all the workmen as a result of
the closure of the business cannot be properly described as retrenchment. The definition of the term
'retrenchment* as given in S.2(oo) is exhaustive. It is reproduced below:
"retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever,
otherwise than as a punishment inflicted by way of disciplinary action, but does not include
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment
between the employer and the workman concerned contains a stipulation in the behalf; or
(bb) termination of the service of the workman as a result of the non-renewal of the contract of
employment between the employer and the workman concerned on its expiry or of such contract being
terminated under a stipulation in that behalf contained therein; or
(c) termination of the service of a workman on the ground of continued ill-health.
Note: Clause (bb) was inserted by Act 49 of 1984 w.e.f. 18.8.1984.
The ordinary meaning of the word retrenchment is that business itself is continuing though a portion of the staffer
labour force is discharged as surplus age.
The definition of retrenchment as given in S.2(oo) gives effect to the ordinary accepted notions of existence in an
existing industry; and it does not include the termination of service of all workmen in an industry when the industry
itself ceases to exist on a bonafide closure or discontinuance of the business of the employer. Thus retrenchment
excludes closure. [Hari prasad Shiv Shankar Shukla verses A.D. Divelka.
The constitution bench, speaking through S.K. Das, J. said in the above case that retrenchment connotes in its
ordinary acceptation that the business itself is being continued but that a portion of staff or labour force is discharged as
a surplus age and the termination of service of all the workmen as a result of closure of business cannot be
properly described as retrenchment. The words, "for any reason whatsoever" mean that it does not
matter why they are discharging the surplus. Thus the court adopted the ordinary, natural and contextual
meaning of the term 'retrenchment'. Within three days of the delivery of the judgement, S.25 FF and S.25 FFF
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were added so that compensation could be payable to workmen whose services are terminated on transfer or
closure of an understanding "as if" the said termination was retrenchment although technically it is not
retrenchment. Similar was the decision in Anakpaila Co-operative Agricultural and Industrial Society Ltd. verses
Workmen, AIR 1963 SC 1489.
However, in landmark case of State Bank of India verses N. Sundara Money, AIR 1976 SC 1111, the
Supreme Court adopted the literal meaning of the term 'retrenchment'. It was held that the expression "for
any reason whatsoever" was very wide and almost admitted no exceptions. According to the literal meaning the
term 'retrenchment' means termination of the service of a workman for any reason whatsoever, other than those
specified in S.2 (oo).
Termination by the employer of the service of a workman for any reason whatsoever would constitute
retrenchment under S. 2(oo) except in cases excepted in that section itself. [The Management of Mohan Lal
verses Bharat Electronics Ltd., AIR 1981 SC 1253 : (1981) 2 LLJ 70].
The definition of the expression 'retrenchment' in S.2 (oo) is so clear and unambiguous that no external
aids are necessary for its proper construction. It is a well-settled position in law that if the termination of service of a
workman is brought for any reason whatsoever, it would be retrenchment, except if the case falls within any of the
excepted categories, namely (i) termination by way of punishment inflicted pursuant to disciplinary action, (ii) voluntary
retirement of a workman (iii) retirement of the workman on reaching the age of superannuation if the contract of
employment between the employer and the workman concerned contains a stipulation in that behalf, (iv)
termination of the service on the ground of continued ill health. Once the case does not fall in any of the
excepted categories the termination of service even if it be according to automatic discharge for service under
agreement would nonetheless be retrenchment within the meaning of the expression in S. 2(oo).
It must as a corollary follow that if the name of the workman is struck off the rolls that itself would constitute
retrenchment. [Delhi Cloth and General Mills Lid. verses . Shambhu Nath, (1978) 1 SCR 591].
If the requirements of the definition are fulfilled, then it Is retrenchment. "For any reason whatsoever" are the
key words. It is well settled that where the termination of service does not fall within any of the excluded categories
mentioned in S. 2(oo) the termination would be ipso facto retrenchment.
The age of superannuation marks the end point of the workman's service. If he is employed afresh thereafter
for a term, such employment cannot be regarded as employment contemplated within the definition of the
expression 'retrenchment'. The termination of petitioner's service on the expiry of the period of his contract
does not fall within the expression 'retrenchment' in S. 2(oo). [Binoy Kumar Chatterjee verses Jugantar
Ltd., (1983) 3 SCC 289 .
The definition of 'retrenchment' in S. 2(oo) means termination by the employer of the service of a workman
for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, and those
expressly excluded by the definition. This is the wider literal interpretation as distinguished from the narrow,
natural and contextual interpretation of the word to mean termination by the employer of the service of a
workman as surplus labour for any reason whatsoever. The voider literal meaning has since been adopted
by the Supreme Court in Simdra Money and subsequent cases rejecting the narrow, natural and contextual
meaning. Hariprasad case is not an authority for the proposition that S.2(oo) only covers cases of discharge of
surplus labour and staff. [Punjab Land Development and Reclamation Corporation Ltd. verses Presiding
Officer, (1990) 3 SCC 682 :(1990) 2 LLJ 70]. it may be noted that the Supreme Court in Hariprasad case had
adopted the narrow interpretation.
In Workmen of the Bangalore Woolen, Cotton and Silk Mills Co. Ltd. verses Its Management, AIR 1962
SC 1963, it was held that termination on ground of health is not "retrenchment". In State Bank of India verses
N. Sundar Money; AIR 1976 SC 1111, it was held that retrenchment means "to end, conclude, cease."
Automatic termination, it was further held in this case, of service on efflux of contractual period amounts to
retrenchment. [It may be noted that Sundra Money case was decided before the inclusion of clause (bb) to S.
2(oo)]. But termination of service does not include retirement and superannuation. In M/s. Parry and C. Ltd.
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verses P.C. Pal and Other, AIR 1970 SC 13 34, it was held that retrenchment means the discharge of surplus number
of labourers by the employer. In Will Cox Buck well India Ltd. verses Jagannath, AIR 1974 SC 1166, termination
of temporary employee was held amounting to retrenchment. Digwadih Colliery verses Workmen 27 FJR 364
relates to badli workers who had worked for more than 240 days and it was held that this amounted to
retrenchment.
Cases of termination by employer for any reasons whatsoever otherwise than in four cases referred to in
the definition would amount to retrenchment. In State Bank of India verses Workmen, AIR 1990 SC 2034, the
employee concerned was working as a clerk in the appellant State Bank of India at the relevant time. A
departmental inquiry was held against him for four acts of misconduct and the inquiry officer came to the
conclusion that two of the charges were fully proved and one charge was proved to a limited extent and the
fourth charge was not established. The competent authority decided to dismiss the employee for service, and
issued a notice to him under paragraph 521(10)(a) of the Sastri Award, to show cause as to why the said
punishment should not be imposed on him. The competent authority also gave him a hearing as required by the
said provision, and thereafter passed an order observing that though the employee may not be dismissed in
view of the extenuating-circumstances but at the same time it would also not be desirable to retain him in the
Bank's service and as such "be discharged on payment on the month's pay at the same time it would also not
be desirable to retain him in the Bank's service an/ as such "be discharged on payment of one month's pay and
allowances in lieu c notice. In terms of para 521(10)(c) of the Sastri Award this would not amount t disciplinary
action." It was held that the termination of the employee in the instant case under paragraph 521(10) (c) of the
Award was as a result of the disciplinar proceedings and was punitive. It was therefore not "retrenchment"
within the meaning of S.2 (oo) of the Act. Hence there was no question of complying with S 25F of the Act.
In Anand Bihari verses Rajasthan State Road Transport Corporation, AIR 19? SC 1003, it was held that the
expression "ill-health" used in sub-clause (c) of 2(oo) has to be construed relatively and in its context. A realistic
and not a technic or pedantic meaning has to be given on the phrase. It must have a bearing on t\ normal
discharge of duties. It is not any illness but that which interferes with the usual orderly functioning of the duties
of the post which would be attracted by the sub-clause. Conversely, even if the illness does not affect general
health or gene capacity and is restricted only to a particular limb or organ but affects the efficient working of the
work entrusted, it will be covered by the phrase, It was further h< that if on account of a workman's disease or
incapacity, the resultant product or i service is likely to be affected in any way or to become a risk to the health* life
property of the consumer, the disease or incapacity has to be categorised as i health for the purpose of the
said clause. In the instant case, the termination defective or sub-normal eye sight being covered by sub-clause (c)
of S. 2(oo) would not amount to retrenchment Hence, the termination per se is not illegal on group that the
provisions of S.25F nave not been followed while effecting it.
In Bisra Stone Lime Co. verses Their Workmen, 1992 LIC 451, it was held that workman suffering from fits of
intermittent nature cannot be said to be suffering from continued ill-health.
Termination of service for very long unauthorized absence from duty does n amount to retrenchment
[Managing Director verses Babasahib Devgenda Patil, 19 Lab 1C 288 (Bom.)]. Termination for unauthorized absence
from duty by workman amounts to retrenchment as it is not covered by any of the exceptions mentioned: S. 2(oo)
[L. Robert D'souza verses Executive Engineer, Southern Railway, (1981) LLJ 330 (SC)]. Termination of service on
the ground that initial appointment w< invalid amounts to retrenchment as it is not covered by any of the
exceptior mentioned in S. 2(oo). [Mithilesh Kumar Singh verses State of Bihar, (1995) 1 LLJ 97 (Pat.)]. Termination
of service on account of closure of business amounts t retrenchment as it is not covered by any of the exception
mentioned in the definition of refreshment [U.P. Chalchitra Nigam Ltd. verses State of UP,, 1991 LIC. 1277 (All)]
Retrenchment as defined in S. 2(oo) read in the context of S. 25 FF and S. 25 FF1 does not cover termination of
service as a result of closure or transfer of a] undertaking though sue!; termination has been assimilated to
retrenchment for certain purposes, namely, the compensation payable to the workman whose services art
terminated as a result of such closure. H.P. Mineral and Industrial Corp. Employee's
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Union verses State of UP., (1996) 7 SCO 139], Section 25-FF and S. 25-FFF deal with compensation for workmen
in case of transfer and closure of undertaking respectively Discontinuance of service of employees employed
as labour on daily wages is not covered by exception (bb) to S. 2 (oo) but it amounts to retrenchment [R.
Srinivasa Rao verses Labour Court, Hyderabad, 1990 LIC 174 (AP)]. Where workmen are employed during
crushing season only in sugar mills and after the season, they cease to work, does not amount to
retrenchment [Morinda Co-op. Sugar Mills Ltd, verses Ram Kishan, (i996) 1 LLJ 870 (SC)].
Termination of services of a workman due to loss of confidence does not amount to retrenchment inflicted by
way of disciplinary action which is an exception recognized in S. 2(oo). However in such a case disciplinary
proceedings are necessary as a condition precedent. [Kamal Kishore Lakshman verses The & Management of M/s
Pan American World Airways, (1987) 1 LLJ 107]. Similarly, termination of services of a workman on the ground of
misconduct does not amount to retrenchment [Municipal Corporation verses Labour Appellate Tribunal, 15 F.J.R.
114].
In Santosh Gupta verses State Bank of Patiala, (1980) 3 SCC 340, discharge of workman on ground of
her/his failure to pass confirmation test, held, amounted to retrenchment, thus requiring compliance with J5.25F. Similarly in Karnataka State Road Transport Corp. verses M Boraiah, (1984) 1 SCC 244, it was held that
discharge from employment or termination of service of a probationer would amount to retrenchment.
However, this view has been overruled by the Supreme Court in M. Venugopalv. Divisional Manager, LIC (1994)2
SCC 323 : In this case services of appellant Development Officer (Class II) was terminated during the extended
period of probation for non-fulfillment of condition of achieving minimum business target stipulated in the
order of appointment. Termination was effected under the stipulation contained in terms of appointment read with
Regulation 14(4) (providing for discharge during probation) of the LIC of India (Staff) Regulations, 1960. It
was held that the operation of S. 2(oo) of I.D. Act was excluded and termination was not deemed to be
retrenchment under S. 2(oo). It was further held that even if I.D. Act was applicable, S. 2 DO) thereof was not
attached in view of clause (bb) thereof as introduced by I.D. (Amendment) Act, 1984 mid hence S. 25-F of the Act
was not invocable. Termination of respondent's service during his probation period is a termination simplicitor
and could not be regarded as punitive requiring enquiry or attracting principles of natural, justice. Such
termination being as per standing order under a relevant stipulation in the contract of appointment. Hence, it
did not amount to retrenchment thereby rendering compliance of section 25F unnecessary. [Raj as than State
Road Transport Corporation verses Ramavtar Sharma, 1998 LLR 526].
In Parry and Co. Ltd. verses P.C. Pal and Others, AIR 1970 SC 1334, it was held that an employer is entitled to
recognize his business in the manner he consider best. So long as this is done the Tribunal cannot question its
propriety even if it results in retrenchment of surplus age of employees. The exclusionary clauses have to be
necessarily constructed strictly having regard to the benefits given by the Act in S. 25-F for those sought to be
reti cached. Sub clause (bb) to S.2(oo) covers termination of employment either because of non-renewal of the
contract or because of expiry of the time stipulated in the contract of employment. But there is a possibility
that the employer may exploit the labour by giving fixed term employment even when a vacancy or post exists.
Therefore, it was held in Dilip Shirke verses Zila Parishad, Yavatmal, (1990) 1 Lab LJ 445 Bom, clause (bb) would
apply only to such cases where the work ceases or the post itself ceases or such other analogous cases where the
contract of employment is found to be fair, proper and bonaflde.
If a person is engaged for a specific period, or for the execution of a specific work and a clear stipulation is
made in the contract of employment that the service shall be terminated at the expiry of the work, the workman
shall not be entitled to claim that he has been retrenched or that the action is violative of the provisions of the
Act. [The Municipal Committee verses The Presiding Officer, Labour Court, 1994 LLR206(P&H)].
If the termination is meant to exploit an employee or to increase the bargaining power of th6 employer, then it
has to be excluded from the ambit of sub-clause (bb) and the definition of "retrenchment" has to be given full
meaning. [Chief Administrator, Haryana Urban Development Authority, Manimajra verses Presiding Officer,
Industrial Tribunal-cum-Labour Court, Rohtak. 1994 LLR 454 (P&H) (DB)].
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Termination effected under the stipulation contained in terms of appointment is not deemed to be
retrenchment under S. 2(oo) and hence S. 25-F is not attracted [State Bank of Rajasthan verses Rameshwar Lal
Gahlot, AIR 1996 SC 1001. Provision for automatic termination of service on account of absence is not
covered by exception (bb) in S. 2(oo). It was further held that in the absence of fixed term in the order of
appointment provision under S. 2(oo) (bb) would not be attracted, Uptron India Ltd. verses Shammi Bhan,.
The decision of this case was followed in Haryana State F.C.C. W. Store Ltd. verses Ram Niwas, (2002) 5 SCC 654
and Executive Engineer, CPWD verses Madhukar Purshotam Kolharkar, (2002) 9 SCC 622.
For applicability of Section 2(oo)(bb), employment must be shown to be under a contract which stipulates
that it would come to an end with the expiry of the project or scheme and workers must be shown to have
been made aware of such stipulation at the commencement of their employment. Mere proof of employment of
casual workers or daily-wagers iii a project or scheme and termination^ their services on the project or
scheme coming to an end not enough to attract the exception sub-clause (bb). As sub-clause (bb) is not
applicable in the present case, termination amounted to retrenchment [S.M. Nilajkar verses Telecom District
Manager .
Section 2(oo)(bb) of the Act contains an exception. It is in two parts. The first part contemplates
termination of service of the workmen as a result of the non-renewal of the contract of employment or its
expiry; whereas the second part postulates termination of such contract Or employment in terms of
stipulation contained in that behalf. Clarifying S.M. Nilajkar case it was held that S.M. Nijajkar case , is not an
authority for the proposition that apart from a project or scheme temporary duration, Section 2(oo) (bb) of
the Act will have no application. Yet again, the Supreme Court in view of the facts and circumstances prevailing
therein had no occasion to consider the second part of Section 2(oo)(bb) of the said Act. In the present case
the respondent, within a span of about 18 months, was appointed thrice and disengaged thrice. The
respondent was categorically told that as per the terms of the contract, the same was short-lived one and
would be liable to termination as and when the appellant thought it fit or proper or necessary to do so. He
further more understood that his services could be terminated at any point of time as it was on a contract
basis. The respondent therefore was not appointed on a permanent or temporary basis. Therefore the
instant case is covered by second part of Section 2(oo)(bb) of the said Act. [Municipal Council Samrala
verses Raj Kumar.
Section 2(oo)(bb) is attracted where the respondent was initially appointed on scheme-based job for a
period of six months and his services were continued thereafter on the same basis till the conclusion of the
scheme. [State of Rajasthan verses Sarjeet Singh.
A xvorkman was engaged for various spells of fixed periods from July 1982 to August 1986. Workman was
"retrenched" at the end of each period. In all orders of engagement, specific periods were mentioned and
engagement had not been temporary in nature. Therefore, it was held that the case is covered by Section
2(oo)(bb) and Section 25-F would be inapplicable. [Kishore Chandra Samal verses Orissa State Cashew
Development Corporation Ltd.
Termination of services of workmen appointed to seasonal posts for the whole season does not amount
to retrenchment in view of Section 2(oo)(bb) [Ganga Kisan Sahkari Chini Mills Ltd. verses 'Jai Veer Singh, (2007) 7
SCC 748]. Similar was the decision in Bhogpur Co-op. Sugar Mills Ltd. verses Harmesh Kumar.
Termination of service on termination of scheme, held, does not amount to retrenchment where
appointment letters categorically showing that appointment was purely contractual and for a fixed period in view
of sub-clause (bb) of Section 2(oo). Therefore, there was no necessity for compliance with Section 25-F. [MD,
Karnataka Handloom Development Corporation Ltd. verses Sri Mahadev Laxman /taw/.
Conditions precedent for Retrenchment of Workmen (S. 25-F) Section 25-F of Chapter V A of I.D. Act provides as
follows: 'Wo workman employed in any industry who has been in continuous service for not less than one year under
an employer shall be retrenched by that employer until-(a) the workman has been given one month's notice in
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writing indicating the reasons for retrenchment and the period of notice has expired or the workman has been
paid in lieu of such notice, wages for the period of notice;
(b) the workman has been paid, at the time of retrenchment compensation which shall be equivalent to
fifteen days, average pay for every completed year of continuous service or any part thereof in excess of six
months; and
(c) notice in the prescribed manner is served on the appropriate Government or such authority as may be
specified by the appropriate Government by notification in the official Gazette. "
In State Bank of India verses N. Sundara Money, (1976) 1 SCC 822 it was held that "if the workman swims into
the harbour of S. 25-F he cannot be retrenched without payment at the time of retrenchment compensation as
prescribed therein read with S. 25B(2)."
Section 25-F is not applicable in case of termination of service on expiry of contract of service for a fixed term
in view of clause (bb) of S. 2 (oo) as introduced by ID (Amendment) Act, 1984[M Venugopal verses Divisional
Manager, LIC(1994) 2 SCC 323; State of Rajasthan verses Rameshwar Lal Gahlot, Harmohinder Singh verses
Kharga Canteen, Ambala Cantt., (2001) 5 SCC 540]. Acceptance of retrenchment compensation cannot
validate an invalid order of termination. [Nor Singh Pal verses Union of India, (2000) 3 SCC 588 : AIR 2000 SC
1401].
In Haryana State EC.C.W. Store Ltd. verses Ram Niwas, (2002) 5 SCC 654, employer was engaged in
the business of procurement and supply of wheat, appointing watchmen/chowkidars for watching the stock
of wheat lying in open area, Their appointment was on contract basis on daily wages (till three months in this
case). It was held that termination of their service after clearance of the stock did not amount to retrenchment.
Hence termination, effected without complying with S. 25-F, did not entitle the watchmen/chowkidars to any
relief.
In PramodJha verses State of Bihar, it was held that Section 25-F nowhere mentions that retrenchment
compensation being made or tendered to the worker along with one month's notice; on the contrary, clause
(b) expressly provides for the payment of compensation being made at the time of retrenchment and by
implication it would be permissible to pay the same before retrenchment after the time when the retrenchment
has taken effect would vitiate the retrenchment.
In Sain Steel Products verses Naipal Singh, (2003) 4 SCC 628 : services of the respondent were
terminated and he has asked to collect the dues before leaving. It was held that since the said termination
order did not specifically mention whether it included the amount contemplated under S. 25-F or not, the
termination order was not in compliance with S. 25-F of the ID Act.
In State of Punjab verses Jagir Singh, (2004) 8 SCC 129, it was held that if the termination of service was
for misconduct, the question of payment of any retrenchment compensation or service of any statutory
notice would not arise.
The period of 240 days has to be counted from the date of joining even though it was on adhoc basis and not
from the date of regular recruitment [Haryana SEB verses Randhir Singh, Assistant Line-Man.
240 days' work in a period of 12 months, though workman had not been in service of employer for
complete one year, held, is enough to satisfy requirement of Section 25-F. [G.M. Haryana Roadways verses
Rudhan Singh, (2005) 5 SCC 591].
Different departments controlled by an apex corporation are distinct "employers". On facts, since
the respondent had worked in different departments of the appellant in broken periods he had therefore
not been in "continuous employment" under the appellant for a period of 240 days prior to his dismissial.
[DGM Oil and Natural Gas Corporation Ltd. verses Ilias Abdulrehman (2005) 2 SCC 183. Indian Cable Co. Ltd.
verses Workmen, (1962) 1 LLJ 409 : 1962 Supp (3) SCR 589, applied].
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240 days of continued service does not by itself give rise to a claim of permanence. A direction for
reinstatement for non-compliance with Section 25-F would only restore to the workman the same status which
he held when his services were terminated. Therefore, the respondent workmen would continue to be ticca
Mazdoor after their reinstatement and they did not any right to get regular work. [Manager, Reserve Bank of
India verses S. A law.
To claim protection of Section 25-F the facts to be proved by workman are: (i) there exists relationship of
employer and employee, (i) he is a workman under Section 2(s), (iii) establishment in which he is employed is
an "industry" within the meaning of the Act, and (iv) he has put in not less than one year of continuous service
as defined in Section 25-B under the employer. These conditions are cumulative. If any one is missing then
Section 25-F will not be attracted. To get relief from court workman has to establish that he has right to
continue in service and that his service has been terminated without complying with provisions of Section
25-F [Surendernagar District Panchayat verses Dohyabhai Amarsingh, (2005) 8 SCC 750].
If retrenchment is effected under the Industrial Disputes Act, the question of complying with the
principles of natural justice would not arise. The principles of natural justice would be attracted only when the
services of some persons are terminated by way of punitive measure or thereby a stigma is attached [State
of U.R verses Neeraj Awasthi, (2006) 1 SCC 667].
If engagement of workman is conditional and for specific period, it being clearly indicated that on
appointment of a regular employee, the employee's engagement was to come to an end, the case is
covered by Section 2 (oo)(bb) and therefore Section 25-F would not be applicable. [Punjab SEE verses
Darbarasingh, (2006)1 SCC 121].
A workman employed on a part-time basis but under the control and supervision of an employer is a
workman in terms of Section 2(s) of the Act and is entitled to claim the protection of Section 25-F. [New India
Assurance Co. Ltd. verses A. Sankaralingam, (2008) 10 SCC 698].
Consequences of Invalid Retrenchment
Termination of service not covered within the excepted or excluded categories mentioned in S. 2(oo)
amounts to retrenchment. Therefore, non-compliance with S. 25-F would vitiate such termination. [Hari
Mohan Rastogi verses Labour Court,.
Retrenchment without complying with S. 25-F would be void ab initio. Such action would entitle the workman
to a declaration for continuation in service with full back wages. [Mohan Lal verses The Management of Bharat
Electronics Ltd. ,(1981) 3 SCC 225]. Respondent was held entitled to 25% bank wages of the total wages payable
during the relevant period. [U.P. State Brassware Corporation Ltd verses Uday Narain Pandey, (2006) 1 SCC 479.
However, where 18 long years had lapsed since termination without complying with S. 25-F, the Supreme
Court awarded monetary compensation in lieu of reinstatement. [Rolston John verses Industrial Tribunalcum-Labour Court, 1995 SCC (L&S) 142].
Section 25-F is applicable to adhoc temporary employees also, if they have worked for more than 240 days
in a year continuously immediately preceding the order of termination. [Umesh Saxena verses Labour Court,
(1993) 1 LLN 809 (All)]. Section 25-F is applicable also to badli workmen continuing in service for one year
[Sarabhai Chemicals verses Subhash N. Pandya, (1984) 1 LLN 601 (Guj.) (DB)]. Section 25-F is applicable even to a
daily rated workman. [Workmen verses Municipal Corporation of Delhi, (1987) 2 LLJ 85 (Del)].
Illegality of, or irregularity in, the making of appointment cannot be a ground to refuse to follow the
provisions of S. 25-F [Punjab Land Development and Reclamation Corp. Ltd. verses Presiding Officer, Labour
Court, (1990) 3 SCC 682].
Clause 25-F (c) is directory in nature. The requirement of notice under this section is a condition
subsequent. It is only intended for keeping the appropriate government informed and therefore, failure to
comply with it prior to effecting retrenchment does not invalidate retrenchment. [Bombay Union of Journalists
verses State of Bombay, AIR 1964 SC 1617].
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Where the retrenchment is proper then the workers are not entitled to compensation in addition to
the retrenchment compensation. [Om Oil & Oil Seeds Exchange Ltd. verses Workmen,. Where the retrenchment
infringed S. 25-F but was otherwise bonafide and reinstatement was likely to be destructive to the employer, the
labour court can award suitable compensation in lieu of reinstatement and back wages. [Mount Mettur
Pharmaceuticals Ltd. verses Second Additional Labour Court, (1985) 1 LLJ 505 (Mad)]. The Supreme Court has
upheld the constitutionality of S. 25.
Procedure for Retrenchment (S. 25-G)
Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he
belongs to a particular category of workmen in that establishment, in the absence of any agreement
between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman
who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches
any other workman (S. 25G).
Thus S.'25-G has given legislative recognition to the well recognised principle of retrenchment, namely'Last
in first out' or Mast come first go'. Departure from this rule is permissible on valid and justifiable grounds. Burden is
on the management to prove existence of such grounds. [Workmen of Sudder Workshop of jorehaut Tea Co.
Ltd. verses The Management of jorehaut Tea Co. Ltd., AIR 1980 SC 1454].
The provisions of S. 25-G are directory but a departure from the principle of last come first go can be made
only for sufficient grounds [G.M Northern Railway, New Delhi verses Judge, Central Industrial Tribunal, (1992) 1
Lab 1C 678].
The principle of Mast come first go' is not applicable in the following cases:
1. Termination of the services of a temporary employee on assessment of his work and suitability with
terms and conditions of his service. [State of U. P. verses Kaushat Kishore Shukla, (1991)1 SCC 691 ].
2. Loss of confidence. But in such a case reasons must be recorded and the rules must be complied with.
[Banwarilal verses Rajasthan S.R.T.C. (1985) 1 LLN391(Raj.)(DB)].
3. The employer may take into account considerations of efficiency and trust worthy character of the
workmen and if he is satisfied that a person with a long service is inefficient, unreliable or habitually
irregular in the discharge of his duties, it would be open to the employer to retrench his services.
[Swadesamitran verses Workmen,].
Re-employment of Retrenched Workmen (S. 25-H)
Where any workmen is retrenched and the employer proposes, to take into his employ any persons, he
shall, in such manner as may be prescribed, give an opportunity to the retrenched workman who are citizens
of India to offer themselves for re-employ men, and such retrenched workmen who offer themselves for
employment shall have preference over other persons (S. 25H).
Section 25H is applicable to all retrenched workmen and not only those covered by S. 25-F read with S. 25-B.
[Central Bank of India verses S. Satyam.
Conditions precedent for Retrenchment of Workmen [(Special Provisions) S.25-N of Chapter VB]
The provisions of Chapter V-B of the Act apply to industrial establishments (not being an establishment of a
seasonal character on in which the work is performed intermittently) in which not less than 100 workmen were
employed on an average per working day for the preceding 12 months. Section 25N is reproduced below: "(1)
No workman employed in any industrial establishment so which this Chapter applies, who has been in
continuous service for not less than one year under an employer shall be retrenched by that employer until,(a) the workman has been given three months' notice in writing indicating the reasons for retrenchment and
the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period
of notice: and
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(h) the prior permission of the appropriate Government or such authority as may be specified by that Government
by notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been
obtained on an application made in this behalf
(2) An application for permission under sub-section (1) shall be made by the employer in the prescribed manner
stating clearly the reasons for the intended retrenchment and a copy of such application shall also be served
simultaneously on the workman concerned in the prescribed manner.
(3) Where an application for permission under sub-section (1) has been made, the appropriate Government or the
specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being
heard to the employer, the workmen concerned and the persons interested in such retrenchment, may, having regard to
the genuineness and adequacy of the reasons stated by the employer, the interests of the workmen and the other
relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy
of such order shall he communicated to the employer and the workmen,
(4) where an application for permission has been made under sub-section (!) and the appropriate Government or the
specified authority does not communicate the order granting or refusing to grant permission to the employer within a
period of sixty days from the date on which such application is made, the permission applied for shall be deemed to
have been granted on the expiration of the said period of sixty days.
(5) An order of the appropriate Government or the specified authority granting or refusing to grant permission shall,
subject to the provisions of sub-section (6), be final and binding on all the parties concerned and shall remain in force for
one year from the date of such order.
(6) The appropriate Government or the specified authority may, either on its. own motion or on the application
made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (3)
or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for adjudication.
Provided that where a reference has been made to a Tribunal under this subsection, it shall pass an award within a
period of thirty days from the date of such reference.
(7) Where no application for permission under sub-section (!) is made, or where the permission for any
retrenchment has been refitsed, such retrenchment shall be deemed to be illegal from the date on which the notice of
retrenchment was given to be workman and the workman shall be entitled to all the benefits under any law for the
time being in force as if no notice had been given to him.
Government may, if it is satisfied that owing to such exceptional circumstances as accident in the establishment or
death of the employer or the like, it is necessary so to do, by order, direct that the provisions of subsection (I) shall not
apply in relation to such establishment for such period as way be specified in the order.
(9) Where permission for retrenchment has been granted under sub-section (3) o 'there permission for
retrenchment is deemed to be granted under subsection (4), every workman who is employed in that
establishment immediately before the date of application for permission under this section shall be entitled to
receive, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for
every completed year of continuous service or any part thereof in excess of six months. "
In Workmen verses Meenkshi Mills Ltd. (1992) 2 LIJ 294 The Supreme Court upheld the constitutionality of S25N. Compensation to Workmen in case of Transfer of Undertaking (S. 25-FF)
Section 25-FF of Chapter VA of I.D. Act provides for compensation to workmen, when the ownership
or management of an undertaking is transferred either by agreement or by operation of law. Section is
reproduced below:
"Where the ownership or management of an undertaking is transferred, whether by agreement or by
operation of law, from employer in relation to the undertaking to a new employer, every workman who has been
in continuous service for not less than one year in that undertaking immediately before such transfer shall be
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entitled to notice and compensation in accordance with the provisions of S.25-F, as if the workman had been
retrenched:
Provided that nothing in this section shall apply to a workman in any case where there has been a change
of employers by reason of the transfer, if
(a) the service of the workman has not been interrupted by such transfer;
(b) the terms and conditions of service applicable to the workman after such transfer are not in any way
less favorable to the workman than those applicable to him immediately before the transfer; and
(c) the new employer is under the terms of such transfer or otherwise legally liable to pay the workman in
the event of his retrenchment, compensation on the basis that his service has been continuous and
has not been interrupted by the transfer. "
The liability to pay retrenchment compensation arises under S. 25-FF when there is a transfer of the ownership
or management of an undertaking. It arises after the transfer of an undertaking and not before provided the
cases does not fall under the proviso to S. 25FF.
Compensation to Workmen in case of Closing Down of Undertakings (S. 25-FFF)
Section 25FFF of chapter VA provides for retrenchment compensation in case of closing down of undertakings. It
is reproduced below:
"(1} When an undertaking is closed down for any reason whatsoever, every workman who has been in
continuous service for not less than one year in that undertaking immediately before such closure shall, subject
to the provision of subsection (2), be entitled to notice and compensation in accordance with the provisions of
Sections 25-F, as if the workman had been retrenched'
Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control
of the employer the compensation to be paid to the workman under clause (b) of Section 2 5-F shall not exceed his
average pay for three months.
Explanation. An undertaking which is closed down by reason merely of-(1) financial difficulties (including financial
losses); or (2) accumulation of undisposed of stocks; or (3) the expiry of the period of the lease or licence granted to
it; or (iv) in a case where the undertaking is engaged in mining operations, exhaustion of the minerals in the area
where such operations are carried on; shall not be deemed to be closed down on account of unavoidable
circumstances, beyond the control of the employer within the meaning of the proviso to this sub-section.
(I-A) Notwithstanding anything contained in sub-section (I), where an undertaking engaged in mining
operations is closed down by reasons merely of exhaustion of the minerals in the area in which such operations are
carried on, no workman referred to in that sub-section shall be entitled to any notice or compensation in
accordance with the provisions of Section 25-F, if(a) the employer provides the workman with alternative employment with effect from that date of closure at the
same remuneration as he was entitled to receive, and on the same terms and conditions of service as were
applicable to him, immediately before the closure;
(b) the service of the workman has not been interrupted by such alternative employment; and
(c) the employer is, under the terms of such alternative employment or otherwise, legally liable to pay
the workman, in the event of the retrenchment, compensation on the basis that his service has
been continuous and has not been interrupted by such alternative employment.
(l-B) For the purposes of sub-sections (I) and (I-A), the expressions "minerals " and "mining operations "
shall have the same meanings respectively assigned to them in clauses (a) and (c) of Section 3 of the Mines and
Minerals (Regulation and Development) Act, 1957 (6) of 1657).
(2) Where an undertaking set up for the construction of buildings, bridges, roads, canals, dams or other
construction work is closed down on account of the completion of the work within two years from the dale on which
the undertaking had been set up, no workman employed therein shall be entitled to notice and compensation under
clause (b) of Section 25-F, but if the construction work is not so completed within two years, he shall be entitled to
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notice and compensation under the section for every completed year of continuous service or any part thereof in excess of
six months. "
In Kalinga Tubes Ltd. verses Their Workmen, the Supreme Court observed, "that the closure cannot be limited
or restricted only td financial, economic or other considerations of the like nature. The closure has to be genuine
and bona fide in the sense in that it would in fact and not a mere pretence for closure...The entire set of
circumstances and facts have to be taken into account while endeavoring to find out, in fact, there has been
a closure and the tribunal or the court is not confined to any particular fact or set of facts or circumstances. The
essence of the matter is not the reason but the factum of closure by whatever reasons motivated.
In S.M. Nilajkar verses Telecom. District Manager, Karnataka, it was held that "undertaking" is a concept narrower
than industry Closure of a government project or scheme would attract the proviso to S. 25-FFF(l). Hence the
workmen under the project or scheme, subject to satisfying the prescribed conditions, would be entitled to notice
and compensation under S. 25-F(b). Sixty days notice to be given of intention to close down any undertaking
A new Section 25FFA was added in 1972. It provides as follows:(1) An employer who intends to close down an undertaking shall serve, at least sixty days before the date on which
the intended closure is to become effective, a notice, in the prescribed manner, on the appropriate Government stating
clearly the reasons, for the intended closure of the undertaking:
Provided that nothing in this section shall apply to
(a) an undertaking in which(1) less than fifty workmen are employed, or
(2)) less than fifty workmen were employed on an average per working day in the preceding twelve months.
(b) an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other construction
work or project.
(2) Notwithstanding anything contained in sub-section (I) the appropriate Government may, if it is satisfied that
owing to such exceptional circumstances as accident in the undertaking or death of the employer or the like it is
necessary so to do, by order, direct that provisions of sub-section (I) shall not apply in relation to such undertaking for
such period as may be specified in the order. Procedure for Closing Down an Undertaking
Section 25-O of Chapter VB of the ID Act provides as follows:
(1) An employer who intends to close down an undertaking of an industrial establishment to which this Chapter applies
shall, in the prescribed manner, apply, for prior permission at least ninety days before the date on which the intended
closure is to become effective, to the appropriate Government, stating clearly the reasons for the intended closure of
the undertaking and a copy of such application shall also be served simultaneously on the representatives of the
workmen in the prescribed manner:
Provided that nothing in this sub-section shall apply to an undertaking set up for the construction of buildings,
bridges, roads, canals, dams or for other construction work.
(2) Where an application for permission has been made under sub-section (I), the appropriate Government, after
making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the
workmen and the persons interested in such closure may, having regard to the genuineness and adequacy of the
reasons stated by the employer, the interests of the general public and all other relevant factors, by order and for
reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be
communicated to the employer and the workmen.
(3) Where an application has been made under sub-section (1) and the appropriate Government does not
communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the
date on which such application is made, the permission applied for shall be deemed to have been granted on the
expiration of the said period of sixty days.
(4) An order of the appropriate Government granting or refusing to grant permission shall, subject to the
provisions of sub-section (5), be final and binding on all the parties and shall remain in force for one year from the
date of such order.
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(5) The appropriate Government may, either on its own motion or on the application made by the employer or
any workman, review its order granting or refusing to grant permission under sub-section (2) or refer the matter to a
Tribunal for adjudication:
Provided that where a reference has been made to a Tribunal under this subsection, it shall pass an award within a
period of thirty days from the date of such reference.
(6) Where no application/o,* permission under sub-section (I) is made within the period specified therein, or where
the permission for closure has been refused, the closure of the undertaking shall be deemed to be illegal from the date of
closure and the workmen shall be entitled to all the benefits under any law for the time being in force as if the
undertaking had not been closed down.
Government may, if it is satisfied that owing to such exceptional circumstances as accident in the undertaking or death
of the employer or the like, it is necessary so to do, by order, direct that the provisions of subsection (I) shall not apply
in relation to such under taking for such period as may be specified in the order.
(8) Where an undertaking is permitted to be closed down under sub-section (2) or where permission for closure is
deemed to be granted under sub-section (3) every workman who is employed in that undertaking immediately before
the date of application for permission under this section, shall be entitled to receive compensation which shall be
equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of
six months.
In Orissa Textile and Steel Ltd. verses . State of Orissa, it was held that the substituted provision S. 25-O (as
substituted by Act 46 of 1982 w.e.f. 21 -8-1984) has removed not only the procedural defects, but also the substantive
vices pointed out in Excel Wear case (1978) 4 SCC 224. It was further held that the restriction imposed are
reasonable and in the interest of the general public. The amended Section 25-O is very different from the
unamended Section 25-O (as it then stood) the constitutional validity of which was upheld in Meenakshi Mills
case. Excel Wear case recognizes that in the interest of general public it is possible to restrict, for a limited
period of time, the right to close down the business. The amended S.25-O lays down guidelines which are to be
followed by the appropriate government in granting or refusing permission to close down. It has to have regard
to the genuineness and adequacy of the reasons stated by the employer. However, merely because the
reasons are genuine and adequate cannot mean that permission to close must necessarily be granted. There
could be cases where the interest of the general public may require that no closure takes place. Undoubtedly
where the reasons are genuine and adequate the interest of the general public must be of compelling or
overriding nature.
Strikes and Lock-outs
The right to strike by workers is a recognised weapon available to them to settle their differences with the
management and enforce the management to accept their demands. Strike is a part of the bargaining process. In
this respect well-known writer R.E. Mathew, Labour Relations and the Law states as follows:
"The strike is itself a part of the bargaining process. It tests the economic bargaining power of each side
and forces each to face squarely the need it has for the other's contribution. As the strike progress, the
workers' savings disappear, the union treasury dwindles, and management faces mounting losses. Demands
are tempered, offers are extended, and compromises previously unthinkable become acceptable. The very
economic pressure of the strike is the catalyst which makes agreement possible. Even when no strike occurs, it
plays its part in the bargaining process, for the very prospect of the hardship which the strike will bring will
force a party to compromise. Collective bargaining is a process of reaching agreement, and strikes are an
integral and frequently necessary part of that process."
Definition of Strike
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According to Webster's Dictionary, strike is "the act of quitting work done by mutual understanding by a body of
workmen as a means of enforcing compliance with demands made on their employer; a stopping of work by
workmen in order to obtain or resist a change in condition of employment."
Section 2(q) of the Industrial Disputes Act, 1947 defines strike as follows:
"Strike" means a cessation of work by a body of persons employed in any industry acting in combination, or a
concerted refusal, or a refusal under a common understanding, of any number of persons who are or have
been so employed to continue to work or to accept employment.
According to the definition the essential ingredients of a strike are:
1. Industry. The strike must be in an industry within the meaning of S.2(j) of the I.D. Act.
2. Employer-employee relationship. There should be relationship of employer-employee between the
employer and the striking workmen,
3. Cessation of the work by a body of persons or a refusal to continue to work or to accept employment.
Cessation of work, refusal to work or discontinuance of work is essential to constitute a strike.
4. Concerted action. Mere cessation of work will not come within the definition of strike unless the
cessation of work is a concerted action for the enforcement of an industrial demand.
Thus strike means the stoppage of work by a body of workmen employed in an industry acting in concert.
Duration of the cessation of work or refusal to work is immaterial. Mere absence from work is not enough, but
there must be concerted refusal to work, to constitute a strike. There must be concerted action by a body of
workmen for the enforcement of an industrial demand. The workmen must be employed in an industry.
In Standard Vacuum Oil Co. verses M.G. Gunuseelam, 1954-11 LLJ 656 (LAT). The workman of factory
wanted to celebrate "May Day". They requested the management to declare that day a holiday. The
workmen were also ready to compensate the loss of work by working on Sunday. The management did not agree.
The workmen applied enblock for casual leave. The Labour Appellate Tribunal held that there was no strike. It is
submitted that this decision is not sound as all the ingredients of strike are present in the instant case.
In TISCO Ltd. verses Workmen, (1972) 2 SCC 383 : it was held that if the employer substitutes the weekly
rest day of Sunday by other rest day without giving a notice of change then it is an illegal change. Refusal to give
work in pursuance of illegal change will amount to lock-out. Therefore, the refusal to work on the substituted day
in this case did not amount to strike. In North Brook Jute Co. Ltd. verses Their Workmen, it was held that
when rationalization scheme is introduced contrary to S. 33 of the Industrial Disputes Act, then refusal to act
according to that scheme does not constitute 'strike'.
In Punjab National Bank verses All India Punjab National Bank Employees' Federation, AIR 1960 SC 160 :
(1960) 1 SCR 806; it was held pen down strike covered under S. 2(q). On a plain and grammatical construction of
the definition of strike in S. 2(q) it would be difficult to exclude a strike where workmen enter the premises of
their employment and refuse to take their tools in hand and start their usual work. Refusal under common
understanding to continue to work is a strike and in pursuance of such common understanding the employees
entered the premises of the Bank and refused to take their pens in their hands that would no doubt be a strike
under S. 2(q). Types of Strike
There are mainly two types of strike, namely (1) general strike; (2) stay in, sit down, tools down and pen down
strikes.
(1) General Strike: A general strike is one, where the workmen join together for a common cause and stay
away from work, depriving the employer of their labour to run the industry. Token strike which is of short
duration a few hours of a day etc.-whose main object is to draw the attention of the employer by demonstrating the
solidarity and co-operation of the employees, is also a kind of general strike. General strike is usually for a longer
period. It is generally resorted to when the employer do not accept the demands of the employees by other
means including a token strike which precedes a general strike.
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(2) Stay in, sit down, tools down and pen down strikes: These are some of the variants of strike resorted to
by workmen under different circumstances. In such cases the workmen enter the place of their work, report to
their duties but do not do any work. In Punjab National Bank verses Their Workman, AIR 1960 SC 160, it was held
that on a plain and grammatical construction of definition of strike as given in S. 2(1), it would be difficult to
exclude a strike where workmen enter the premises of their employment and refuse to take their usual work.
In this case it was held that a 'pen down' strike is a strike within the meaning of S. 2(q), Similarly 'tools down' strike
where factory workers refuse to work with their tools is strike under S. 2(q). In Mysore Machinery Manufacturer
verses The State, AIR 1966 Mysore 51, where dismissed workmen were staying on premises and refused to leave it
was held to be a criminal trespass and not a 'stay-in' strike.
In addition to these two forms of strikes which are usually resorted to by the employees, a few more may be
discussed below although some of them are not strikes within the meaning of S. 2(q).
Hunger strike: When a group of workmen resort to fasting on or near the place of work or the residence of
the employer with a view to coerce the employer to accept their demands it is called hunger strike. It is not
really a strike but adoption of coercive method to achieve some objective. But under certain
circumstances it may come under S. 2(q). In Piparich Sugar Mills Ltd. verses Their Workmen, AIR 1960 SC
1258, certain workmen who held key positions in the appellants mill resorted to hunger strike at the residence
of the managing director with the result that other workmen who came to do the work could not be given
work. It was held by the Supreme Court that in the above circumstances the concerted action of the
workmen who went on hunger strike amounted to strike within the meaning of S. 2(q).
Sympathetic Strike: A sympathetic strike is resorted to in sympathy of other striking workmen to encourage
or to extend moral support to them. The workmen who go on such a strike do not have any demand or
grievance of their own. In Kambalingam verses Indian Metallurgical Corporation, Madras, 1964-1 LLJ 81, it
was held that when the workers in concert absent themselves out of sympathy to some cause wholly unrelated
to their employment or even in regard to condition of employment of other workers in service under other
managements, such absence could not be held to be strike, as the essential element of the intention to use it
against the management is absent. However, the management would be entitled to take disciplinary action
against the workmen for their absence on the ground of breach of service.
Co Slow. In this case the workmen come to their place of work and do work also but with a slow speed in
order to lower down the production and thereby causes loss to the employer, Go-slow is not a 'strike' within
the meaning of S. 2(q). Go-slow is a serious type of misconduct. In Bharat Sugar Mills Ltd, verses Jai Singh 1961 II LLJ 664, the Supreme Court held that go-slow is one of the most pernicious practice that discontented or
disgruntled workmen sometime resort. It would not be far from wrong to call it dishonest.
Work to rule: Work to rule is resorted to by workmen to circumvent the provisions of law governing
their service conditions. In this case the workmen strickly observe the rules while performing their duties and
thus slow down the tempo of work which causes inconvenience to the public and embarrassment to the employer.
Work to rule is not a strike within the meaning of S. 2(q) as there is no stoppage of work.
Gherao: It means "to surround" or "to confine". It is a criminal offence. It does not fall within the meaning
of strike in S. 2(q) of the I.D. Act, 1947. Right to Strike
In T K. Rangarajan verses Government of Tamil Nadu, (2003) 6 SCC : that right to resort to strike is not a
fundamental right. The Court explained why there is no such right. Further there is no legal/statutory right to go on
strike and there is no moral or equitable justification to go on strike. Government employees cannot claim that they
can take the society at ransom by going on strike. Even if there is injustice to some extent, as presumed by some
employees, in a domestic welfare state, they have to resort to the machinery provided under different statutory
provisions for redressal of their grievances. Strike as a weapon is mostly misused which results in chaos and total
maladministration. Strike affects the society as a whole and particularly when two lakh employees go on strike en
masse, the entire administration comes to a grinding halt. In the case of strike by teachers, the entire educational
system suffers; many students are prevented from appearing in their examinations which ultimately affects their
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whole career. In case of strike by doctors, innocent patients suffer; in case of strike by employees of transport
services, entire movement of the society comes to a standstill: the business is adversely affected and number of
persons find it difficult to attend to their work, to move from one place to another or one city to another. On
occasions, public properties are destroyed or damaged and finally this creates bitterness among the public against
those who are on strike. There are about twelve lakh employees in the State of Tamil Nadu. Out of the total
income from direct tax, approximately 90% of the amount is spent on the salary of the employees. In a society where
there is large scale unemployment and number of qualified persons eagerly waiting for employment in
government departments or in public sector undertakings, strike cannot be justified on any equitable ground.
In the prevailing situation, apart from conscious of rights, there has to be full awareness of duties,
responsibilities and effective methods for discharging the same. For redressing their grievances, instead of
going on strike, if employees were to do some more work honestly, diligently and efficiently, such gesture would
not only be appreciated by the authority but also by the people at large. The reason being, in a democracy
even though they are government employees, they are part and parcel of the governing body and owe duty
to the society.
Earlier in B.R, Singh verses Union of India, (1989) 4 SCC 710, it was held that right to strike though not a
fundamental right but a recognised mode of redressal of grievances of workers. But the right to strike is not
absolute under our industrial jurisprudence and restrictions have been placed on it. These are to be found in
Sections 10(3), 10-A (4-A), 22 and 23 of the Industrial Disputes Act, 1947. Definition of Lock-out
Lock out is the antithesis of strike, Strike is a weapon in the hands of the labour to force the management
to accept their demands. Similarly lockout is a weapon in the hands of the management to coerce the labour
to come down in their demands relating to the conditions of employment. As in the case of strike so also in
the case of lockout there is no severance of relationship of employer and employee.
According to Webster's Dictionary, lock-out is withholding of employment by an employer and the whole or partial
closing of his business establishment in order to gain concessions from employees.
Section 2(1) of the Industrial Disputes Act, 1947 defines lock-out as follows: "Lock-out" means the temporary
closing of a place of employment, or the suspension of work, or the refusal by an employer to
continue to employ any number of persons employed by him,
The definition has the following three ingredients of a lock-out:
1. Temporary closing of a place of employment; or
2. suspension of work, or
3. refusal to continue to employee any number of persons employed by the employer.
In case of lockout the workmen are asked by the employer to keep away from work, and therefore, they are
not under any obligation to present themselves for work. In Shri Ramchandra Spinning Mills verses State of
Madras, AIR 1956 Mad. 241, it was observed that if the employer shuts down his place of business as a means of
reprisal or as an instrument of coercion or as a mode of exerting pressure on employees or generally speaking
when his act is what may be called act of belligerency there would be a lockout, (n Lord Krishna Sugar Mills Ltd.,
Saharanpur verses The State of U.R, 1960-11 LLJ 76, it was held that a lockout may sometime be not at all
connected with economic demands; it may be resorted to as a security measure. In Lakshmi Devi Sugar Mills Ltd.
verses Ram Sarup, it was held that in case of lockout there is neither alteration to the prejudice of workmen
of the conditions of the service applicable to them nor a discharge or punishment whether by dismissal or
otherwise.
The liability of the employer in case of lock-out would depend upon whether the lock-out was justified and
legal or not and the provisions regarding lay-off compensation are not applicable. Where the manager was
violently attacked and other members of staff were threatened the lock-out was fully justified. Kairbetta Estate
verses Rajamanickam
Distinction between Lock-out and Closure
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In the case of closure, the employer does not merely close down the place of business, bubhe closes the
business itself. Lock-out, on the other hand, indicates the closure of the place of business and not the closure of
business itself. In Express Newspapers Ltd. verses Their Workmen, (1962) 2 LLJ 227, the Supreme Court gave the
following points of distinction between the two:
1. In lock-out there is no severance of employer-employee relationship while in closure there is severance of
such relationship.
2. Lock-out is caused by the existence or apprehension of an industrial dispute. A closure need not be due to an
industrial dispute.
3. A lock-out is a weapon available to an employer to persuade the workers by coercive process to agree to
his point of view. Thus it is a tactic in bargaining. On the other hand, a closure is closing down the
business and thereby ending bargaining.
In General Labour Union (Red Flag) Bombay verses B. verses Chavan and Others, (1985) 1 SCC 312, it was
held that "the essence of the lock-out is the refusal of the employer to continue to employ workmen. There is no
intention to close the industrial activity. Even if the suspension of work is ordered it would constitute lock-out. On the
other hand closure implies closing of industrial activity as a consequence of which workmen are rendered
jobless." To determine whether the employer has resorted to lock-out or closure "the true test is that when it
is claimed that the employer has resorted to closure of industrial activity, the Industrial Court in order to
determine whether the employer is guilty of unfair labour practice must ascertain on evidence produced before it
whether the closure was a device or pretence to terminate the services of workmen or whether it is bonafide
and for the reasons beyond the control of the employer. The duration of the closure may be significant fact to
determine the intention and bonafldes of the employer at the time of closure but it is not decisive of the matter."
Prohibition of Strikes and Lock-outs in Public Utilities
Section 22 of the Act deals with prohibition of strikes and lock-outs in industries carrying public utility service.
The strikes and lockouts in public utility services are not absolutely prohibited but certain conditions are to be fulfilled
by the workmen before resorting to strike or by the employers before resorting to lockout. Subsection (1) of
Section 22 and sub-section (2) of Section 22 prescribe the conditions which are to be fulfilled in case of strike and
lockout respectively. The intention of the legislature in enacting the section was to provide sufficient safeguards in
matters of public utility services, as otherwise it would result in great inconvenience to the general public and the
society.
Section 22( 1) provides as follows:
"No person employed in a public utility service shall go on strike in breach of contract(a) without giving to the employer notice of strike, as herein after provided, within six weeks before striking;
or
(b) within fourteen days of giving such notice; or
(c) before the expiry of the date of strike specified in any such notice as aforesaid; or
(d) during the pendency of any conciliation proceedings before a conciliation officer and seven days after the
conclusion of such proceedings."
Thus a strike in a public utility can take place only when 6 weeks' notice has been served and 14 days have
expired after serving the notice. According to S. 22(3) notice of strike (within six weeks before striking) is not
necessary when there is already a lock-out in existence in the public utility concerned.
Further, the employees should not go on strike before the expiry of the date of the strike during the pendency
of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such
proceedings. Any strike commenced in contravention of these provisions would be illegal.
Section 22(2) lays down similar conditions which an employer must fulfill before resorting to lock-out. It
provides as given below:
"No employer carrying on any public utility service shall lock-out any of his workmen -
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(a)
(b)
(c)
(d)
without giving them notice of lock-out as hereinafter provided, within six weeks before locking-out; or
within fourteen days of giving such notice; or
before the expiry of the date of lock-out specified in any such notice as aforesaid; or
during the pendency of any conciliation proceedings before a conciliation officer and seven days after the
conclusion of such proceedings."
Section 22(3) provides that no notice of lock-out is necessary where there is already in existence a strike in
the public utility service concerned.
Section 22(3) further provides that the employer shall send intimation of such lock-out or strike on the day
on which it is declared, to such authority as may be specified by the appropriate Government either generally or
for a particular area or for a particular class of public utility services.
Sub-sections (4), (5) and (6) of S. 22 are reproduced below:
"(3) The notice of lock-out or strike under this section shall not be necessary where there is already in
existence a strike, or as the case may be lockout in the public utility service, but the employer shall send
intimation of such lock-out or strike on the day on which it is declared, to such authority as may be specified by
the appropriate Government either generally or for a particular area or for a particular class of public utility services.
(4) The notice of strike referred to in sub-section (1) shall be given by such number of person or persons and
m such manner as may be given in such manner as may be prescribed.
(5) The notice of lock-out referred to in sub-section (2) shall be given in such manner as may be prescribed.
(6) If on any day an employer receives from any person employed by him any such notices as are referred to in
sub-section (I) or given to any persons employed by him any such notices as are referred to in sub-section (2) he
shall within five days thereof report to the appropriate government or to such authority as that government
may prescribe, the number of such notices received or given on that day."
In Ramnagar Cane and Sugar Co. Ltd. verses Jatin Chakaravarty, it was held that during the pendency of
conciliation proceedings between a public utility concern and one of its unions attracts the provisions of S. 22(I)(d)
to the strike declared by another union of the same concern and makes the said strike illegal.
In India General Navigation and Railway Co. Ltd. verses Workmen, the Supreme Court held that lock-out
within seven days of conciliation proceedings not illegal if resulting as a consequence of illegal strike already
started. In Essorpe Mills Ltd. verses Presiding Officer, Labour Court, (2008) 7 SCC 594, it was held that Section
22 provides for six week's advance notice for strike, and fourteen days' time is given to the employer to consider
the demand raised in the strike notice. Valid strike cannot commence before the expiry of six weeks' time
under Section 22(1 )(a) and fourteen days thereafter under Section 22(1 )(b). Strike notice has to be given in
Form 4L' to the employer who in turn is required to inform the Government/ prescribed authority under Section
22(6). There is no provision for sending notice by workers direct, to the Conciliation Officer. Any purported
notice of strike which does not observe the prescribed time period is not a valid notice under Section 22.
Consequently, such an invalid notice cannot also commence conciliation proceedings under Section 20. In the
absence of conciliation proceedings, approval of the Conciliation Officer under Section 33(2)(b) proviso was
not necessary. It was further held that earlier strike which was illegal could not be remedied by a subsequent
strike in compliance with Section 22. General Prohibition of Strikes and Lock-outs
The prohibition of strikes and lock-outs contained in S. 23 is general in nature which applies to both public
utility as well as to non-public utility establishments. The section is reproduced below:
"No workman who is employed in any industrial establishment shall go on strike in breach of contract and no
employer of any such workman shall declare a lock-out(a) During the pendency of conciliation proceedings before a Board and seven days after the conclusion of
such proceedings.
(b) During the pendency of proceedings before a Labour Court, Tribunal or National
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Tribunal and two months after the conclusion of such proceedings; (bb) during the pendency of arbitration
proceedings before an arbitrator and two months after the conclusion of such proceedings, where a notification
has been issued under sub-section (3-A) of Section 10-A; or
(c) During any period in which a settlement or award is in operation, in respect of any of the matter covered by
the settlement or award."
The object of these provisions is to ensure a peaceful atmosphere to enable a conciliation or adjudication or
arbitration proceeding to go on smoothly. It may be noted that conciliation proceeding before a Conciliation
Officer is no bar to a strike or lockout under this section.
In Chemicals and Fibres of India Ltd. verses D.G. Bhoir & Others, it was held that pendency of a dispute
between an individual workmen as such and the employer does not attract the provisions of S. 23.
In Workmen verses Motor Industries Co. Ltd., it was held that there is a difference between a strike envisaged by
S. 23(1) in respect of matter covered by a settlement envisaged by S. 29. If the strike is in the matter not
covered by the settlement, it is not an illegal strike under S. 24 read with S. 23(3).
Illegal Strikes and Lock-outs
Section 24 provides that a strike or lock-out in contravention of S. 22 or S. 23 is illegal. The section is reproduced
below:
(1) A strike or a lock-out shall be illegal if,
(1) It is commenced or declared in contravention of S. 22 or S. 23; or
(2) It is continued in contravention of an order made under sub-section (3) of Section 10 or sub-section (4-A) of
Section 10-A.
(2) Where a strike or lock-out in pursuance of an industrial dispute has already commenced and is in existence at
the time of the reference of the dispute to a Board, an arbitrator, a Labour Court, Tribunal or National Tribunal, the
continuance of such strike or lock-out shall not be deemed to be illegal, provided that such strike or lock-out was not
at its commencement in contravention of the provisions of this Act or the continuance thereof was not prohibited
under sub-section (3) of section 10 or sub-section (4-A) of 10-A.
(3) A lock-out declared in consequence of an illegal strike or a strike declared in consequence of an illegal lock-out
shall not be deemed to be illegal."
Thus S. 24( 1) lays down that a strike or lock-out shall be illegal if, (i) it is commenced or declared in contravention of S.
22 or S. 23; or (ii) it is continued in contravention of an order made under S. 10(3) of S. 10-A (4-A) of the Act.
Sub-section (2) and (3) of S. 24 provide that a strike or lock-out shall not deemed to be illegal in the following cases:
(1) If it at its commencement not in contravention of the provisions of the Act; or
(2) If its continuance was not prohibited under S. 10(3) or S. 10-A(4-A); or (iii) if lock-out is declared in
consequence of an illegal strike or a strike is declared in consequence of an illegal lock- out.
In Ballarpur Collieries Co. verses Presiding Officer, C.G.I.-T, Dhanbad, it was held that a mere breach of standing
order cannot render strike illegal.
Justifiability of a Legal/Illegal Strike
Case law regarding justifiability of strike is discussed below:
In Chandramalai Estate verses Workmen, it was held that illegal strike cannot be half legitimate. The Supreme
Court held that the Industrial Tribunal cannot come to the conclusion that strike was half justified and half
unjustified. The award of payment of fifty percent of the total employments for strike period was set aside.
In Management of Charukulam Tea Estate (P) Ltd. verses Workmen, it was held that workmen were entitled to
wages for the strike period as their strike was not unjustified. It was further held in this case that the pendency of
conciliation proceedings before the conciliation officer, as distinct from the Board, does not render the strike
illegal.
In India General Navigation and Railway Co. Ltd. verses Their Workmen, the Supreme Court held that it is
difficult to understand how a strike in respect of a public utility service, which is clearly illegal, could at the
same time be characterized as perfectly justified. These two conclusions cannot in law coexist.
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In Cropton Greaves Ltd. verses Workmen, it was held that even if a strike is illegal, it cannot be castigated as unjustified,
unless the reasons for it are entirely perverse or unreasonable. In Syndicate Bank verses K. Umesh Nayak, (1994), the
Supreme Court held that a strike may be justified or unjustified depending upon several factors.
In Nizam Sugar Factory Ltd. verses Workmen, 8 FJR 878 (LAT), it was held that when the reply by We management to
the demands of the workmen was not such that a strike was necessary the strike would be unjustified.
In Dalmia Cement (Bharat) Ltd. verses Workers' Union, (1957) 2 LLJ (LAT) (Bom), it was held that a strike may be unjustified
because the demands were pitched unreasonably high or that the strike was resorted to inspite of very reasonable
attitude of the employer or because the demands were not made bonafide but with extraneous motives, mainly for the
purpose of embarrassing the employer. Consequences of Illegal Strike
The workers have a right to go on strike as per the provisions of the Act. If the workmen go on an illegal strike, the
question arises whether they are entitled to wages for the strike period and whether the employer can take
disciplinary action against those workmen. The consequence of illegal strike has been discussed below under the following
heads:
1. Wages: In Crompton Greaves Ltd. verses Workmen, (1978) it was held that in order to entitle the workmen to
wages for the period of strike, the strike should be legel and justified. A strike is legal if it does not violate any provision of
the statute. It cannot be said to be unjustified unless the reasons for it are entirely perverse or unreasonable. Whether a
particular strike is justified or not is a question of fact which has to be judged in the light of the facts and circumstances
of each case. The use force, violence or acts of sabotage resorted to by workmen during a strike period which was legal
and justified would disentitle them to wages for strike period.
This position of law continued upto 1990. In Bank of India verses T.S. Kelawala, (1990): (1990), the Supreme Court
invoked the principle of "no work, no pay". In this case the bank employees contended that although they had gone on
strike for four hours and thereafter resumed their duties, the Bank deducted wages for the whole day which was
impermissible as the Bank could have at the most deducted only pro rata wages. Rejecting their contention, the
Supreme Court held that normally that contention on the part of the workers would have been valid. But in a case where
the employees went on strike during the crucial working hours which generated work for the rest of the day, to accept that
argument was in effect to negate the purpose and efficacy of the remedy, and to permit its circumvention effectively.
Workers' attendance after the four-hour strike was useless because there was no work to do during the rest of the hours. It
was for this reason that the Bank had made it clear, in advance, that if they went on strike for the four hours as
threatened, they would not be entitled to wages for the whole day and hence they needed not report for work
thereafter. The Division Bench of the Supreme Court commenting on the legal and illegal strikes that "whether the
strike is legal or illegal, the workers are liable to lose wages for the period of strike and the liability to lose
wages does not either make the strike illegal as a weapon or deprive the workers of it. When the workers resort to
it, they do so knowing fully well its consequences. The legality of a strike only saves them from a disciplinary
action since a legal strike is recognized as a legitimate weapon in the hands of workers to redress their grievances.
It appears that there is confusion between the strike as a legitimate weapon in the hands of the workmen and
the liability of deduction of wages incurred on account of it, whether the strike is legal or illegal." It was further
held in this case that deduction of wages for participation in such mass misconduct not dependent upon
disciplinary proceeding. However, the management will not be justified in deducting wages without proper
inquiry of such employees who. were genuinely desired to discharge their duties but could not do so for failure
of the management to give necessary protection. The question of wages for justifiable and legal strike was not
involved in this case nor was it commented upon by the court.
The matter has been decided by the Constitution Bench of the Supreme Court in Syndicate Bank verses K.
Umesh Nayak. In this case the Supreme Court held that there is no conflict between the decision in Kelawala 's
case and earlier cases, because in Kelawala 's case, the Supreme Court was only commenting on the legal and
illegal strikes, and the question of wages for justifiable and legal strike was not involved or commented upon. The
Supreme Court held that a strike may be illegal if it contravenes the provisions of sections 22, 23 or 24 of the
Act or of any other law or the terms of employment depending upon the facts of each case. Similarly, a strike
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may be justified or unjustified depending upon several factors such as the service conditions of the workmen, the
nature of demands of the workmen, the cause which led to the strike, the urgency of the cause or the demands of
the workmen, the reasons for not resorting to the dispute resolving machinery provided by the Act or the contract
of employment or the service rules and regulations etc. When the law or the contract of employment or the
service rules provide for a machinery to resolve the dispute, resort to strike or lock-out as a direct action is
prima facie unjustified. This is, particularly so when the provisions of the law or the contract or the service rules
in that behalf are breached. For then, the action is also illegal.
It was further held in this case that the strike or lock-out as a weapon has to be used sparingly for redressal of
urgent and pressing grievances when no means are available or when available means have failed to resolve it. It
has to be resorted to, to compel the other party to the dispute to see the justness of the demand. It is not to be
utilized to work hardship to the society at large so as to strengthen the bargaining power. Every dispute between
an employer and employee has to take into consideration the third dimension, viz. the interest of the society
as a whole.
The Supreme Court further held in this case that wages during the strike period is payable only if strike is both legal
and justified but not payable if strike is legal but not justified or justified but illegal. Whether the strike is legal or
justified are questions of fact to be decided on the evidence on record. Under the Act, the question has to be decided
by the industrial adjudicator, it being an industrial dispute within the meaning of the Act. There is nothing in the
decisions of the Supreme Court in Churukalam Tea Estate and Cropton Greaves cases which is contrary to the
view in T.S. Kalewala. Thus the Court harmonized, affirmed and followed Bank of India verses T.S. Kelawala.
In the Syndicate Bank case the Bank employees resorted to strike during conciliation proceedings despite
Bank's circular for deduction of wages. The strike was resorted on Bank's failure to implement immediately the
settlements arrived between the parties conferring additional benefits to the employees. The High Court decided in
favour of the employees. But the Supreme Court held that the situation was not such that the dispute could not
brook delay and await resolution by legal mechanism. The High Court erred in recording findings on legality and
justifiability of the strike and on that basis deciding the matter in favour of the employees. The Supreme Court
referred the dispute regarding deduction of wages for adjudication to appropriate authority.
Sincerely in H.M.T. Ltd. verses H. M. T Head Office Employees' Association, (1996) 11 SCC 319: it was held that
an illegal strike, even if justified, does not entitle the workmen to wages.
In HAL Employees' Union verses Presiding Officer, lock-out in consequence of illegal strike although declared
without following the procedure prescribed by S. 22(3) of the Act or S. 6(2) of the U.P. Industrial Disputes Act,
held, both legal and justified. Hence, the workmen were not entitled to wages for the period of such lock-out.
[Syndicate Bank verses K. Umesh Nayak, followed].
2. Dismissal of workmen: In Mis Burn & Co. Ltd. verses Their Workmen, it was laid down that mere
participation in the strike would not justify suspension or dismissal workmen. In India General Navigation and
Railway Co. Ltd. verses Their Workmen , where the strike was illegal the Supreme Court held that in case of
illegal strike the only question of practical importance would be the quantum or kind of punishment. To decide
the quantum of punishment a clear distinction has to be made between violent strikers and peaceful strikers. Violent
strikes are those workmen who obstruct the loyal workmen frorn carrying on the work or take part in violent
demonstrations and act in defiance of law and order. Peaceful strikers are those workmen who are silent
participators in the strike. The violent strikers are to be dealt with more severally. It is not in the interest of the
industry that there should be wholesale dismissal of all the workmen who merely participated in the strike. It is
certainly not in the interest of the workmen themselves. An Industrial Tribunal, therefore, has to consider the
question of punishment, keeping in view the overriding consideration of the full and efficient working of the
industry as a whole. The punishment of dismissal or termination of service, has, therefore, to be imposed on such
workmen as had not only participated in the illegal strike but had fomented it, and had been guilty of violence or
doing acts detrimental to the maintenance of law and order in the locality where work had to be carried on. The
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Court stressed the need for individual charge-sheet being delivered to individual workman so that the degree
of misconduct of each can be separately considered.
Thus mere taking part in an illegal strike without anything further would not justify the dismissal of all the
workmen taking part in the strike.
In Bata Shoe Co. (P) Ltd. verses D.N. Ganguli, (1961) 1 LLJ 303 (SC): the Supreme Court observed that
participation in an illegal strike may not necessarily be punished with dismissal, but when an inquiry has been
properly held and the employer has imposed the punishment of dismissal on the employee who has been guilty of
misconduct of joining the illegal strike, the Tribunal should not interfere unless it finds unfair labour practice or
victimisation against the employee.
In Punjab National Bank verses Their Workmen, it was held that in case of strike the employer may bar
the entry of the strikers within the premises by adopting effective and legitimate method in that behalf. He
may call upon the employees to vacate, and, on their refusal to do so, take due steps to suspend them from
employment, proceed to hold proper inquires according to the standing orders and pass proper orders against
them subject to the relevant provisions of the Act.
In Express Newspaper (P) Ltd. verses Michael Mark, AIR 1963 SC 1141, it was held that workmen by merely
going on strike do not abandon their employment; the employment continues as far as workmen are concerned.
The management cannot, by imposing a new term of employment, unilaterally convert the absence from duty of
striking workmen into abandonment of their employment. It may well be that under the standing orders the
management can, if the strike is illegal take disciplinary action against the strikers.
In Oriental Textile Finishing Mills, Amritsar verses Labour Court, Jullundur, it was held that even where the
strike is illegal, before any action was taken with a view to punishing strikers, a domestic inquiry must he held.
The Supreme Court reaffirmed the principle that mere taking part in an illegal strike without anything further
would not necessarily justify the dismissal of all the workmen taking part in the strike.
In Gujarat Steel Tubes verses Gujarat Steel Tubes Mazdoor Sabha, the workmen resorted to strike and as
consequence the management terminated their services. The Supreme Court ordered the reinstatement of those
workmen who were not found guilty of misconduct after a proper enquiry being held. Difference between Lay-off
and Lock-out
The concept of lock-out is different form the concept of lay-off'. Therefore, where the closure of place of
business, amounts to lock-out under S. 2(1), it would be impossible to bring it within the scope of lay-off under S.
2(kkfc). [Kairbetta Estate verses Rajamankkam AIR 1960 SC 893]. The following are the points of distinction
between the two:
1. Nature: Lay-off means the failure, refusal or inability of an employer on account of shortage of coal, power etc. to
give employment to a workman temporarily while lock-out means the temporary closing of a place of employment,
or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him.
2. Reasons: In case of lay-off the employer is unable to give employment to a workman on account of shortage of
coal, power or raw materials or the accumulation of stocks or the breakdown of machinery or natural calamity or for
any other connected reason, while in case of lock-out the employer closes the place of business for some other reason.
3. Weapon of collective bargaining: Lay-off is resorted to by An employer for economic and trade reasons and
it is not used as a weapon of collective bargaining. On the other hand, lock-out is antithesis of strike. It is a weapon
available to the employers to persuade the workers by coercive process to agree to their point of view.
4. Industrial dispute: Lay-off is resorted to by an employer without an industrial dispute. While lock-out is
resorted to in case of an industrial dispute.
5. Prohibition: The Act prohibits strikes and lock-outs in certain cases under S. 22 and S, 23. There is no provision
prescribing prohibition for lay-off.
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6. Compensation: In case of lay-off the employer may be liable t6 pay compensation as provided in the Act.
In case of lock-out the employees are not entitled to lay-off compensation but the liability of the employer to pay
wages for the lock-out period will depend upon whether the lock-out was justified and legal or not.
Difference between Lay-off, Lock-out and Retrenchment
j. Employer-employee relationship: In case of lay-off and lock-out, the relationship of employer-employee is
only temporarily suspended, it does not come to an end. But in case of retrenchment, such a relationship comes to an
end at the instance of the employer.
2. Weapon of collective bargaining: Lock-out is a weapon available to the employer to persuade the workers by
coercive process to agree to their point of view, Lay-off and retrenchment are not weapons of collective bargaining.
3. Economic reasons: Lay-off and retrenchment are resorted to for economic and trade reasons. But lock-out is
resorted to persuade the workmen to bring down their demands or as a security measure.
4. Industrial dispute: Lock-out is resorted to due to and during an industrial dispute. Lay-off and retrenchment are
not concerned with a dispute.
5. Prohibition: The Act prohibits lock-out in certain cases under S. 22 and S. 23 but no such prohibition is prescribed
for lay-off and retrenchment.
Therefore, we do not think that the general hypothetical considerations the pen down strikes may in certain
cases lead to rowdy demonstrations of result in disturbances or violence or shake the credit of the bank would
fustify the conclusion that even if the strikers are peaceful and non-violent and have done nothing more than
occupying their seats during Office hours, their participation in the strike would itself disqualify them from claiming
reinstatement."
6
The Trade Unions Act, 1926
The Trade Union movement in India was originated in the British Rule period in 19th century on the establishment of
certain factories and mills in Bombay and Bengal. The modern factory system in India began after 1851, when the first
cotton mill was established in Bombay in 1851, and thereafter a number of factories began to be established in Bombay
and Bengal. There was exploitation of workers due to the (1) policy of laisser-faire, (2) the doctrine of freedom of
contract and (3) the prevalence of hire and fire rule. Gradually the working force realized that they must unite to
improve their conditions. The declension of First World War in 1914, which ended in 1919, resulted in high increase in the
cost of living which created frustration among the workers class. After 1918 a large number of trade unions were
formed. The All India Trade Union Congress was established which represented the economic, social and political interests of
workers. The Trade Unions Act was passed in 1926 after a great hue and cry, it was enforced with effect from 1st June,
1927. The Act, inter alia (1) legalizes Trade Union, (2) provides for their registration, (3) gives certain immunities to a
registered trade union, (4) allow the trade union to participate in political activities. Objects of the Act
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The main object of the Trade Union Act is to provide for the registration of trade unions, and thereby to protect
the union leaders from being victimized for legitimate trade union activities. The Act also lays down rights and
liabilities of registered trade unions and permits the constitution of separate fund for political purposes.
Main features of the Act
The Act provides for the registration of trade unions and defines the law relating to registered trade unions. Machinery
has been set up under the Act, for registration of trade unions. Every trade union shall be a body corporate. The
Societies Registration Act, 1860, the Co-operative Societies Act, 1912, and the Companies Act, 1956 do not apply to
registered trade unions.
The Act provides for the formation of a trade union, which means a combination of seven or more persons formed for
the purpose as contained in the definition of the trade unions.
The most important right that the labour gained under the Act is with respect to immunity from civil and criminal
prosecution.
The Act also makes provision for the following matters:

(1) Conditions governing the registration of trade unions;
(2) The obligations to which a trade union is subject after registration; and (iii) the rights and privileges accorded to
registered unions.
Thus the Act indirectly gives the workers the right to go on a strike and engage in collective bargaining.
Definitions
Trade Dispute. According to S. 2(g) of Trade Unions Act, 1926 "trade dispute " means any dispute between employers and
workmen or between workmen and workmen or between employers and employers which is connected with the
employment or non-employment, or the terms of employment, or with the conditions of labour, of any person and
"workmen" means all persons employed in trade or industry whether or not in the employment of the employer with
whom the trade dispute arises.
Thus S. 2(g) gives the definition of "trade dispute" as well as that of "workmen". The first part of S. 2(g)
which defines "trade dispute" is analyzed as under:
"Trade dispute" means any dispute:
between employers and workmen, or
between workmen and workmen, or
between employers and employers, which is connected with:
employment, or
non-employment, or
the terms of employment, or
the conditions of labour, of any person.
The definition of "trade dispute" in the Trade Unions Act, 1926 is almost identical with the definition of "industrial
dispute" in the Industrial Disputes Act, 1947. Therefore, most of the discussion on "industrial dispute" given earlier will
also be relevant here.
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Workmen. The latter part of S. 2(g) of the Trade Unions Act gives the definition of workmen as under:
"workmen " means all persons employed in trade or industry whether or not in the employment of the employer with
whom the trade dispute arises.
The definition of "workmen" has two ingredients: (1) "Workmen" means all persons employed in trade or
industry.
(2) It is immaterial whether the persons employed are or are not in the employment of the employer with whom
the trade dispute arises.
There is a marked difference in the definition of workmen under the Trade Unions Act, 1926 and the Industrial Disputes
Act, 1947. The main difference arises because of the words "whether or not in the employment of the employer with
whom the trade dispute arises" included in the definition under the Trade Unions Act, 1926. Thus the scope of the
word "workmen' is very wide under the Trade Unions Act, 1926.
The word "trade" and "industry" have not been defined in the Trade Union Act 1926. In Mohan Gymkhana Club
Employees' Union verses Gymkhana Club, it was held that the word 'trade' means any business carried on with a
view to profit and involves exchanges of goods for services or goods for money.
In Rangaswami verses Registrar of Trade Unions, AIR 1962 Mad. 231, the Madras High Court held that reading S. 2(g)
and S. 2(h) together, 'industry' should be one as would amount to trade or business, i.e., a commercial undertaking. It is
doubtful whether the Trade Unions Act, 1926 and the Industrial Disputes Act, 1947 can be read as pari material, and
therefore, the definition of 'industry' in the Industrial Disputes Act, 1947 should not be used in interpreting the
provisions of the Trade Unions Act, 1926. The Court held in this case that employees of Madras Raj Bhavan could not get
their Union registered under the Trade Unions Act, 1926, because they were not employed in a trade or industry.
In Registrar of Trade Union verses Government Press Employment Union, 1976 Lab 1C 280 (Mad), it was held
that the workmen employed in an industrial undertaking like the Government Press, Pondicherry, are 'workmen'
entitled to the benefits of Trade Union Act, 1926. Mahajan J., further held that it is wrong to interpret the word
'industry' used in the Act of 1926 in the light of the widely extended meaning to it by the Industrial Disputes Act,
1947. According to the Concise Oxford Dictionary, 'industry' means(1) diligence; (2) habitual employment
in useful works; (3) branch of trade or 'manufacture'. 'Manufacture' according to the same dictionary means "making
of articles by physical labour or machinery especially on large scales; branch of such industry as woolen, etc." It
would be clear from this dictionary meaning of the words 'industry' and 'manufacture' that no profit motive
is necessarily involved in an industry. There can be little doubt that the Government Press has been manufacturing
with the aid of printing press, as well as physical labour, and on a large scale, such as challans, gazettes and calendars,
budget papers etc. It would, therefore, be an industry within the meaning of the Trade Union Act, 1926 and the
respondents, being the persons employed in such an industry must be rightly regarded as 'workmen' within the
meaning of the Act.
Trade Union. Section 2(h) of the Trade Unions Act, 1926 defines 'Trade Union" which is reproduced below:
"Trade Union " means any combination, whether temporary or permanent, formed, primarily for the purpose of
regulating the relations between workmen and employers or between workmen and workmen, or between
employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes
any federation of two or more Trade Unions: Provided that this Act shall not affect:
(1) Any agreement between partners as to their own business;
(2) any agreement between an employer and those employed by him as to such employment; or
(3) any agreement in consideration of the sale of the goodwill of a business or of instruction in any profession,
trade or handicraft. The main part of the definition is analyzed as under: "Trade Union" means:
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(1) any combination, whether temporary or permanent:
(2) formed primarily for the purpose of
(a) Regulating the relations between (1) workmen and employers, or (2)
workmen and workmen, or (3) employers and employers, or
(b) For imposing restrictive conditions on the conduct of any trade or business, and
(3) Includes any federation of two or more Trade Unions.
Thus a ombination can be a "Trade Union" if it is made primarily for the purposes as provided in S. 2(h) of the Trade
Union Act, 1926.
In Registrar, Trade Unions verses M. Mariswamy, 1947 Lab 1C 695 (Kant), the Mysore State Employees'
Provident Fund Employees' Union was held to be a Trade Union as the activity of the Provident Fund Organisation
is 'industry'. A single Judge of the Karnataka High Court observed:
"If the said section is analyzed, it will be clear that any combination, whether temporary or permanent will be a
Trade Union, if it is formed primarily for one of the following purposes: (1) to regulate the relations between
workmen and employers; (2) to regulate the relations between workmen and workmen; (3) to regulate relations
between employers and employers; (4) for imposing restrictive conditions on the conduct of any trade or business. The
expression 'Trade Union' also includes federation of two or more Trade Unions. It is clear from the definition of the
expression 'Trade Union' that it could be a combination either of workmen or of employees or of both, provided it is
formed primarily for one of the purposes mentioned in clause (h) of Section 2 of the Act. It is therefore, possible to have
a Trade Union consisting only of employers. The emphasis in Section 2(h) is on the purpose for which the Union is formed
and not so much on the persons who constitute the Union."
In Tamil Nadu N.G.P's Unions verses Registrar, Trade Unions, (1961) 1 LLJ 753 (Mad.), it was held that government
servants engaged in sovereign activities of the government cannot be permitted to raise trade dispute and thus form a
trade union. Similar was the decision in Non-Gazzetted Government Officers' Union verses Registrar, AIR 1962 Mad. 234. In
the latter case, the Tamil Nadu Non-Gazzetted Government Officers' Union (including amongst its members submagistrates, tehsildars etc.) was refused registration by the Registrar. The Madras High Court upheld the decision of the
Registrar. The Court observed that the civil servants engaged in sovereign and regal activities of the State are not
'workmen5 within the meaning of the Trade Union Act, 1926. However, workmen in independent corporations i.e.
quasi-governmental agencies which are purely industrial in character, e.g., Machine Tool Factory, General Insurance
Corporation, Life Insurance Corporation etc. can form a Trade Union. It further held that the concept of "collective
barganing" which is the rationale behind the Trade Union movement is wholly inappropriate to Government
servants whose terms and conditions are regulated by statute, and it is obvious that the statute cannot be altered by
contract.
In Rangaswami verses Registrar of Trade Unions, (Mad.) Madras Raj Bhavan Workers' Union did not come within
the scope of the Trade Unions Act, 1926 so as to entitle it to registration there under. The single Judge concluded
that it could not be said that the employees of Raj Bhavan were employed in a trade or business carried on by the
employer. The services rendered by them were purely of a personal nature. The single judge of the Madras High Court
observed:
"The term 'trade union' as defined under the Act contemplates the existence of the employer and the
employees engaged in the conduct of a trade or business. The definition of the term 'workmen' in Section 2(g) would
prima facie indicate that it was intended only for interpreting the term 'trade dispute'. But even assuming that definition
could be imported for understanding the scope of the meaning of the term 'trade union' in Section 2(h), it is obvious
that the industry should be one as would amount to a trade or business i.e., a commercial undertaking. So much is
plain from the definition of the term 'trade union' itself. . . I am very doubtful whether at all it could be said that
the Industrial Disputes Act and the Trade Unions Act form as it were a system or code of legislation so that either
could be read together as in pan materia, that is, as forming one system and interpreting one in the light of another."
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Thus for a Trade Union the following conditions must be present:
1. It is a combination of two or more persons.
2. The principal object of the combination must be regulating the relation between workmen inter se, or
between employers inter se or between workmen and employers. The object of the combination may be
imposing restrictive conditions on the conduct of any trade or business.
3. The personnel must be either employers or workmen.
4. Where the persons are workmen, they must be employed in a trade or industry. There must be a contract
of employment and potentiality to raise a trade dispute. The word 'industry' must be understood in the sense
of a commercial undertaking.
Therefore, government servants cannot form a Trade Union under the Trade Unions Act, 1926. Thus every trade
union is an association but every association is not a trade union.
In Tirmula Tirupati Devasthanam verses Commissioner of Labour, 1995 Supp (3) SCC 653, employees working in
Power and Water Wings of Devasthanam, irrespective of the said wings being an industry or not, held, entitled
to get their union registered. The registration of union of employees working in the aforesaid wings of the appellant
could not be cancelled at the appellant's instance merely on the ground that its said wings weryiot an industry. The
question as to whether the said wings were or were not an industry, left open. It cannot be disputed that
the relationship between the appellant and the workmen in question is that of employer and employees.
The registration of the association of the said workmen as a trade union under the Act has nothing to do
whether the said wings of the appellant are an industry or not.
Registration of Trade Unions

Appointment of Registrars. Sections 3(1) provides that the appropriate Government has to appoint a
person to be the Registrar of Trade Unions for each State. Section 3(2) provides that the appropriate
Government may appoint as many additional and deputy Registrars of Trade Unions as it thinks fit for the
purpose of exercising and discharging, under the superintendence and direction of the Registrar, such power
and functions of the Registrar.
The appropriate government may specify and define the local limits within which any such additional or
deputy Registrar shall exercise and discharge the powers and functions specified.
In North Eastern Rly. Employees Union verses 3rd ADJ, (2006) 10 SCC 417, it was held that Registrar is
the authority charged with the duty of administering the provisions of the Act. Hence, High Court's order
designating the General Manager, North Eastern Railway as the authority to hold the election of the North
Eastern Railway Employees Union was held erroneous. Therefore, the elections directed to be held under
the supervision of the Registrar or an officer designated by him for that purpose.
Mode of Registration. Section 4 of the Act prescribes the mode of registration of Trade Unions.
According to sub-section 1 of Section 4 "Any seven or more members of a Trade Union may, by subscribing
their names to the rules of the Trade Union and by otherwise complying with the provisions of this Act with
respect to registration, apply for registration of the Trade' Union under this Act." The first proviso to the
sub-section (1) [inserted by Act 01 200) (w.e.f. 9.1.2002)] states that no Trade Union of workmen shall be
registered unless at least ten per cent, or one hundred of the workmen, whichever is less, engaged or
employed in the establishment or industry with which it is connected are the members of such Trade Union,
on the date of making of application for registration. The second proviso [inserted by Act 2001^w.e.f.
9.1.2002] states that no Trade Union of workmen shall be registered unless it has on the date of making
application not less than seven persons as its members, who are workmen engaged or employed in the
establishment or industry with which it is connected.
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Sub-section 2 of Section 4 prescribes that "where an application has been made under sub-section (I) for
the purpose of registration of a Trade Union, such application shall not be deemed to have become invalid
merely by reason of the fact that at any time after the date of the application, but before the registration of
the Trade Union, some of the applicants but not exceeding half of the total number of persons who have
made the application, have ceased to be members of the Trade Union or have given notice in writing to the
Registrar disassociating themselves from the application". It means that if only half or less than half of the
members ceased to be members of the Union or disassociate themselves from applications as aforesaid, the
application for registration shall remain valid.
Application for Registration. According to S. 5 a Trade Union may become a registered Trade Union in the following
manner. The section is reproduced below:
"(1) Every application for registration of a Trade Union shall be made to the Registrar, and shall be accompanied by a
copy of the rules of the Trade Union and a Statement of the following particulars, namely:
(a) The names, occupations and addresses of members making the application; (aa) in the case of a Trade Union of
workmen, the names, occupations and addresses of the place of work of the members of the Trade Union making the
application;
(b) The name of the Trade Union and the address of its head office; and
(c) The titles, names, ages, addresses and occupation of the office-bearers of the Trade Union.
(2) Where a Trade Union has been in existence for more than one year before the making of the application for its
registration, there shall be delivered to the Registrar, together with the application, a general statement of the assets and
liabilities of the Trade Union prepared in such form and containing such particulars as may be prescribed."
According to Regulation 3 of the Central Trade Union Regulations, 1938, "every application for registration of a Trade Union
shall be made in Form A". Regulation 7 prescribes that if the application is made by a Trade Union which has previously
been registered by the Registrar of any State the Union shall submit with its applications a copy of the certificate
of registration granted to it and copies of the entries relating to it in the Register of Trade Unions for the State.
According to Regulation 8 the fee payable for the registration of Trade Union shall be Rs. 5/-. Advantages of Registration.
Registration of Trade Unions is not necessary. A Union already formed can be registered. A registered Trade Union has
the following advantages or privileges:
(1) Body corporate. On registration a Trade Union acquires the status of a body corporate by the name under which it is
registered (S. 13). Thus a registered Trade Union has a separate legal entity.
(2) Perpetual succession and a common seal. A registered Trade Union shall have a perpetual succession and a common
seal (S. 13).
(3) Power to acquire and hold property. A registered Trade Union shall have a right to acquire and hold both movable and
immovable property (S. 13).
(4) Can sue and can be sued. A registered trade union can sue and be sued (S. 13).
(5) Immunity from prosecution. Section 17 grants immunity to office-bearers or members of a registered Trade Union from
punishment under S. 120-B(2) of the Indian Penal Code, if the offence arises out of any agreement entered into between
members whose purpose is to further the objects specified in S. 15 of the Trade Unions Act. No other offence is
protected by S. 17. The agreement should not be an agreement to commit an offence.
Section 18(1) grants immunity from civil action to registered Trade Union, any office-bearer of the registered
Trade Union or a member, of the registered Trade Union. The immunity is for any action done (1) in contemplation of
a trade dispute to which a member or the Trade Union is party or (2) in furtherance of a trade dispute to which a member of
the Trade Union is a party. The immunity is only for action made exclusively on (he ground (1) that such act induces some
other person to break a contract of employment, or (2) that it is in interference with the trade, business, employment
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of some other person, right of some other person to dispose of his capital as he wills or right of some other persons to
dispose of his labour as he wills.
Section 18(2) affords immunity to a registered Trade Union in respect of any tortuous act done by an agent of the
trade union in contemplation or furtherance of a trade dispute, it is proved that person acted without the knowledge of or
contrary to express instruction given by the executive of the trade union.
(6) Enforceability of agreement. An agreement between members of a registered Trade Union shall not be void or
voidable merely by reason of the fact that any of the objects of the agreement are in retraint of trade (S. 19).
(7) Certificate of registration. The certificate of registration issued by the Registrar will be conclusive evidence that the
Trade Union has been duly registered (S. 9).
Unrecognized Trade Union. In Chairman, SBI verses All Orissa State Bank Officers' Association, (2002) 5 SCC 669 : AIR
2002 SC 2279, the Supreme Court held that an unrecognized union is not a superfluous entity. It is entitled to meet and
discuss with the management/employer about grievances of any individual member relating to his service conditions and
to represent an individual member in domestic or departmental inquiry and proceedings before Conciliation Officer or
Labour Court or Industrial Tribunal. The management/employer cannot out rightly refuse to have such discussions with
an unrecognized trade union. However, whether in certain matters concerning individual workmen discussion and
negotiation with the unrecognized trade union, of which they were members would be useful, held, has to be decided
by the management or its representative at the spot. Hence provision in State Bank of India circular restraining its
functionaries from entering into any dialogue or accepting any representation from the office-bearers of an
unrecognized association, rightly set aside by High Court. Thus an unrecognized trade union cannot participate in
discussions relating to general issues concerning all workmen.
Provisions to be contained in the rules of a Trade Union. For internal working and for governing the relationship
between the members and the Trade Union a Trade Union is required to have certain rules dealing with certain matters
specified in S. 6 of the Trade Unions Act and in the manner specified in Schedule II of the Central Trade Unions
Regulation 1938. Section 6 is reproduced below:
"A Trade Union shall be entitled to registration under this Act unless the executive thereof is constituted in
accordance with the provisions of this Act and the rules thereof provide for the following matters, namely;
(a) The name of a Trade Union;
(b) The whole of the objects for which the Trade Union has been established;
(c) The whole of the purposes for which the general funds of a Trade Union shall be applicable, all of which purposes
shall be purposes to which such funds are lawfully applicable under this Act;
(d) The maintenance of a list of members of the Trade Union and adequate facilities for the inspection thereof by
the office-bearers and members of the Trade Union;
(e) the admission of ordinary members who shall be persons actually engaged or employed in an industry with which the
Trade Union is connected, and also the admission of the number of honourary or temporary members as office
bearers required under Section 22 to form the executive of the Trade Union;
(ee) the payment of a subscription by members of the trade Union which shall be not less than
(1) one rupee per annum for rural workers;
(2) three rupees per annum for workers in other unorganized sectors; and
(3) twelve rupees per annum for workers in any other case;
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(f) the conditions under which any member shall be entitled to any benefit assured by the rules under which any
fine or forfeiture may be imposed on the member;
(g) The manner in which the rules shall be amended varied or rescinded;
(h) The manner in which members of the executive and the other office bearers of the Trade Union shall be appointed
and removed;
(hh) the duration of period being not more than three years, for which the members of the executive and other
office-bearers of the Trade Union shall be elected;
(i) the safe custody of the funds of the Trade Union, and annual audit, in such manner as may be prescribed, of the
accounts thereof, and adequate facilities for the inspection of the account books by the office-bearers and members of
the Trade Union; and
(j) The manner in which the Trade Union may be dissolved."
According to clause (b) of S. 6 the rules of a Trade Union must provide for whole of the objects for which the Trade
Union has been established. In I.T. Commissioner, W. Bengal verses Indian Sugar Mills Association, AIR 1975 SC 506.
Rules 4 and 64 of a registered Trade Union (respondent) were repugnant with each other. It was contended that Rule 64
should be treated as void as it was inconsistent with the stated objects of the Union. The Supreme Court held that the
Court has no right to assume some of the stated objects of the Union as primary to declare others in apparent conflict
with them as of ho effect. All the rules formed by the Union coexist. The Court has no right to rewrite the rules of a
registered Trade Union by deleting any of them.
In Bokajan Cement Corporation Employees' Union verses Cement Corporation of India Ltd., (2004) 1 SCC 142 : AIR
2004 SC 245 : 2004 SCC (L&S) 23, the Supreme Court held that S. 6(e) does not provide for automatic cessation of
members of union on cessation of employment. It deals only with eligibility conditions for admission of ordinary and
executive members of a trade union. The requirement in S. 6(e) that ordinary members of a trade union shall be
"persons actually engaged or employed in an industry" is only a condition for admission, not one that provides for
automatic cessation of membership on cessation of employment.
In B.S.V. Hannmantha Rao & Another verses Deputy Registrar of Trade Union and Deputy Commissioner of Labour
and Others, (1988) 1 LLJ 83 AP, it was held that the rules cannot be amended to provide for making the President of the
Union as election authority, empowering him to nominate all office-bearers and denying authority to the general body
to remove the president from office before the expiry of his term.
Clause (g) of S. 6 provides that the rules of a Trade Union must provide the manner in which the rules shall be
amended, varied or rescinded. Section 28 (3) lays down that a copy of every alteration made in the rules of a
registered Trade Union shall be sent to the Registrar within fifteen days of the making of the alteration. Section 29
empowers the appropriate Government to make regulations for the purpose of carrying into effect the provision
of this Act. Section 30 makes it obligatory to publish Regulations in the official Gazette and they will come into force
after such publication. Regulation 9 of the Central Trade Union Regulations, 1938 provides that on receiving a copy of an
alteration made in the rules of a Trade Union under S. 28 (3), Registrar, unless he has reason to believe that the alteration
has not been made in the manner provided by the rules of Trade Union, shall register the alteration in a register to be
maintained for this purpose and shall notify the fact that he has done so to the Secretary of the Trade Union. In Indian
Oxygen Limited verses Their Workmen, AIR 1969 SC 306, the Supreme Court held that the combined effect of S. 6(g)
28(3), 29 and 30 and Regulation 9 is that a registered Trade Union can alter its rules only in the manner provided in those
provisions.
Power to call for further particulars and to require alteration of name. In this respect S. 7 provides as follows:
"(1) The Registrar may call for further information for the purpose of satisfying himself that any application complies with
the provisions of S. 5, or that the Trade Union is entitled to registration under S, 6 and may refuse to register the
Trade Union until such information is supplied.
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(2) If the name under which a Trade Union is proposed to be registered is identical with that by which any other
existing Trade Union has been registered or in the opinion of the registrar so nearly resembles such name as to be
likely to deceive the public or the members of the either Trade Union, the Registrar shall require the persons applying
for registration to alter the name of the Trade Union stated in the application, and shall refuse to register the Union
until such alteration has been made."
Registration. Section 8 provides that the "the Registrar, on being satisfied that the Trade Union has complied with
all the requirements of this Act in regard to registration, shall register the Trade Union by entering in a register to be
maintained in such form as may be prescribed, the particulars relating to the Trade Union contained in the
statement accompanying the application for registration,"
In re Inland Steam Navigation Workers Union, it was held that the Registrar on being satisfied that the Trade
Union has complied with all the requirements of the Act in regard to registration must register the Trade
Union. The Registrar has no discretion in this matter. The Registrar is not justified in refusing to register a union
on the ground that the Union applying for registration is a union declared to be unlawful by the government under
a different name. The functions of the Registrar are limited to seeing that the requirements of the Act have been
complied with.
In Keshoram Rayon Workers Union , Registrar of Trade Unions, it was held that workmen of an industrial
establishment can form any number of Trade Unions. There may be rival Unions. The Act does not require a
Union applying for registration to give notice to all existing Unions,
In Chemosyn (P) Ltd. & Others verses Kerala Medical and Sales Representatives Association, (1988) II LLJ
43 (Kerala), it was held that a Trade Union registered under the Act is not a statutory body. It is not created by
statute. Therefore, it is not amenable to writ jurisdiction.
In ONGC Workmen's Association verses State of West Bengal and Others, (1988) II LLJ 335 (Cal), it was held
the Registrar of Trade Union has no quasi-judicial authority to hold any injury by allowing parties to examine
witnesses and decide the dispute as to who are the real office-bearers. To decide such a dispute an inquiry may
be held by the Registrar in the presence of both the rival groups claiming to be office-bearers in this regard is
administrative in nature.
In Tata Workers Union verses State of Jharkhand, (2002) III LLJ 474 (Jhar HC), it was held that no provision of
law provides for holding of election under the supervision of Registrar, Trade Union.
In R.N. Singh verses State of Bihar, 1998 LLR 645, it was held that provisions of S. 8 relate to only registration
of a trade union. It is only a Civil Court which has jurisdiction to decide that dispute under the Trade Unions Act,
There is no provision permitting or empowering the Registrar to refer internal disputes relating to officebearers for adjudication to any other forum.
In B. Srinivasa Reddy verses Karnataka Urban Water Supply & Drainage Board Employee s Association,
(2006) 11 SCC 731 (2): it was held that under the Trade Unions Act, 1926 an unregistered trade union or a trade
union whose registration has been cancelled has no manner of right whatsoever. Even the rights available
under the Industrial Disputes Act, 1947 have been limited only to those trade unions which are registered
under the Trade Unions Act, 1926 by insertion of clause 2(qq) in the Industrial Disputes Act, 1947 w.e.f.
21.8.1984 defining a trade union to mean a trade union registered under the Trade Unions Act, 1926.
Certificate of Registration. The Registrar, on registering a Trade Union under S. 8, shall issue a certificate of
registration in the prescribed form which shall be conclusive evidence that the Trade Union has been duly
registered under this Act (S. 9).
Certificate of registration continues to hold good until it is cancelled.
Minimum requirement about memberships of a Trade Union. A registered Trade Union of workmen shall at all
times continue to have not less than ten per cent, or one hundred of the workmen, whichever is less, subject
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to a minimum of seven, engaged or employed in an establishment or industry with which it is connected, as
its members (Section 9)
Cancellation of Registration. According to S. 10 a certificate of registration of a Trade Union may be withdrawn or cancelled by
the Registrar:
(a) On the application of the Trade Union to be verified in such manner as .may be prescribed, or
(b) If the Registrar is satisfied that the certificate has been obtained by fraud or mistake, or (2) that the Trade Union has
ceased to exist or
(3) Has willfully and after notice from the Registrar contravened any provision of this Act or
(4) Allowed any rule to continue in force which is inconsistent with any such provision, or
(5) Has rescinded any rule providing for any matter provision for which is required by S. 6;
(c) If the registrar is satisfied that a registered Trade Union of workmen ceases to have the requisite number of members.
The proviso to S. 10 requires that not less than two months' previous notice jn writing specifying the ground on which it
is proposed to withdraw or cancel the certificate shall be given by the Registrar to the Trade Union before the certificate
is withdrawn or cancelled otherwise than on the application of the Trade Union. No such notice is necessary when the
registration is withdrawn or cancelled on an application by the Trade Union itself.
In Tata Electric Companies Officers Guild verses Registrar of Trade Unions, (1994) 1 LLJ 125 (Bom), it was held that for
cancellation of registration of a Trade Union willful contravention of provision of the Act is necessary. In this case the Trade
Union did not file return due to misunderstanding of accounting year and the return was filed soon after receipt of show
cause notice from the Registrar. Under these circumstances the cancellation of registration on the ground of non-filing of
return was held improper.
In Bombay Fire Fighters Services Union, Mumbai verses Registrar Trade Unions, Bombay, (2003) II LLJ 1100 (Bom), it was
held that the cancellation of registration of a Trade Union in violation of mandatory provisions of S. 10 of the Act is illegal and
improper.
Regulation 9 of the Central Trade Union Regulations, 1938 provides that the Registrar on receiving an application for the
cancellation of registration shall, before granting the application, satisfy himself that the withdrawal or cancellation of registration
was approved by a general meeting of the Trade Union, or if it was not so approved, that it has the approval of the majority
of the members of the Trade Union. For this purpose, he may call for such further particulars as he may deem necessary and
may examine any officer of the Union.
Appeals. According to S. 11 (1) any person aggrieved by any refusal of the Registrar to register a trade Union or by the
withdrawal or cancellation of a certificate of registration may, within such period as may be prescribed (Regl. 19 of the
Central Trade Union Regulations, 1938 provides that any appeal made under S. 11(1) must be filed within 60 days of the date
on which the Registrar passed the order against which the appeal is made), appeal:
(a) where the head office of Trade Union is situated-within the limits of a Presidency town (i.e. Bombay, Calcutta or Madras)
to the High Court, or (aa) where the head office is situated in an area, falling within the jurisdiction of a Labour Court or an
Industrial Tribunal, to that Court or Tribunal, as the case may be;
(b) where the head office is situated in any other area, to such Court not inferior to the Court of an additional
or assistant Judge or a principal Civil Court of original jurisdiction, as the appropriate Government may appoint in
this behalf for that area.
According to S. 11(2) the appellate Court may dismiss the appeal or pass an order directing the Registrar to
register the Union and to issue a certificate of registration. The Court may also set aside the order for
withdrawal or cancellation of the certificate. The Registrar must comply with any such order passed by the
appellate Court. Section 11(3) enacts that for the purpose of an appeal under S. 11(1) an appellate Court shall,
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so for as may be, follow the same procedure and have the same powers as it follows and has when trying a
suit under Code of Civil Procedure 1908, and may direct by whom the whole or any part of the costs of the
appeal shall be paid, any such costs shall be recovered as if they had been awarded in a suit under the said
Code.
In Mukandlron and Steel Works Ltd. verses G. Deshpande, Registrar of Trade Unions, Bombay, (1986) II LLJ 290
(Bom), the Registrar cancelled the registration of a Trade Union for contravention of the provisions of S. 28 by
not filing the annual returns. Later on, the Registrar withdrew the cancellation of registration on the ground
that returns have been submitted subsequently. It was held that a Trade Union whose registration has been
cancelled has remedies in the form of an appeal or in the form of an application for fresh registration. If the
appeal succeeds the order of cancellation could be held to be void ah inito and the Union would continue as if
order of cacellation has not been passed. If first registration is permitted it would be effective from the date
thereof. Once the Registrar cancels or withdraws the registration of a Trade Union he has no power to review it
and thus- cannot withdraw the order of cancellation because of subsequent events.
Section 11(4) provides that in the event of the dismissal an appeal by any Court appointed under S.
ll(l)(b) the person aggrieved has a right of appeal to the High Court.
Registered office. According to Section 12 all communications and notices to a registered Union may be
addressed to its registered office. Notice of any change in the address of the head office shall be given within 14
days of such change to the Registrar in writing and the changed address shall be recorded in the register referred to
in Section 8.
Incorporation of registered Trade Unions. According to S. 13 a registered Trade Union shall have the following
characteristics:
(1) Body corporate,
(2) Perpetual succession,
(3) Common seal,
(4) Power to acquire and hold both movable and immovable property,
(5) Power to contract,
(6) Can sue and be sued under its name.
Certain Acts not to apply to registered Trade Union. Section 14 lays down that the following Acts shall not apply
to any registered Trade Union and the registration of any such Union under any such Act shall be void:
(a) The Societies Registration Act, 1960,
(b) The Co-operative Societies Act, 1912,
(c) The Companies Act, 1956,
Objects on which General Funds may be used
Section 15 provides that the general funds of registered Trade Union shall not be spent on any other objects than the
following, namely:
(a) The payment of salaries, allowance and expenses to office bearers of the Trade Union;
(b) The payment of expenses for the administration of the Trade Union including audit of accounts of the general funds
of the Trade Union;
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(c) the prosecution or defence of any legal proceeding to which the Trade Union or any member thereof is a
party, when such prosecution or defence is undertaken for the purpose of securing or protecting any rights of
the Trade Union as such or any rights of the Trade Union as such or any right arising out of the relations of any
member with his employer or with a person whom the member employs;
(d) the conduct of trade disputes on behalf of the Trade Union or any member thereof;
(e) the compensation of members for loss arising out of trade disputes;
(f)
the allowances to member or their dependants on account of death, old age, sickness, accidents or
unemployment of such members;
(g) the issue of on the undertaking of liability under policies of assurance on the lives of members, or under policies
insuring members against sickness, accident or unemployment;
(h) the provision of educational, social or religious benefits for members including the payment of the expenses
of funeral or religious ceremonies for deceased members or for the dependants of members; (i) the upkeep of a
periodical published mainly for the purpose of discussing
Questions affecting employers or workmen as such;
(j) the payment in furtherance of any of the object on which the general funds of the Trade Union may be spent, or
contributions to any cause intended to benefit workmen in general, provided that the expenditure in respect of such
contributions in any financial years shall not at any time during that year be in excess of one-fourth of the combined
total of the gross income which has up to that time accrued to the general funds of the Trade Union during that year
and of the balance at the credit of those funds at the commencement of that year; and
(k) subject to any conditions contained in the notification, any other object notified by the appropriate
Government in the Official Gazette. In Maria Raposo verses H.M. Bhandarkar and Others, (1994) II LLJ 680 (Bom),
purchase of units of U.T.I, by the office-bearers of the Union in their individual names out of General Gund of the
Union, was held to be a speculative activity and not investment.
Constitution of a Separate Fund for Political Purposes
Section 16 provides that a registered Trade Union may constitute a separate fund from contributions separately
levied for or made to that fund, from which payments may be made for the promotion of the civil and political
interests of its members, in furtherance of any of the objects specified below:
(a) the payment of any expenses incurred, either directly or indirectly by a candidate or prospective candidate
for election as a member of any legislative body constituted under the constitution or of any local authority before,
during or after the election in connection with his candidature or election; or
(b) The holding of any meeting or the distribution of any literature or documents in support of any such
candidate or prospective candidate; or
(c) the maintenance of any person who is a member of any legislative body constituted under the constitution or any
local authority; or
(d) the registration of electors or the selection of a candidate for any legislative body constituted under the constitution
or for any local authority; or
(e) the holding of political meeting of any kind, or the distribution of political literature or political documents of any
kind.
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It is further provided that no member shall be compelled to contribute to that fund constituted for political purposes
and a member who does not contribute to the said fund shall not be excluded from any benefit of the Trade Union, or
placed in any respect either directly or indirectly under any disability or at any disadvantage as compared with other
members of the Trade Union (except in relation to the control or management of the said fund) by reason of his not
contributing to the said fund, and contribution to the said fund shall not be made a condition for admission to the
Trade Union.
Immunity from Criminal Conspiracy in Trade Disputes
Before the passing of the Trade Unions Act, 1926 the workmen could not organise and participate in strikes for
improvement of their conditions of service. There was a strike in 1918 by workers in Buckingham and Carnatic Mills,
Madras. The Madras High Court awarded Rs. 75,000 as damages and imprisonment for Mr. B.P. Wadia under the
common law principle of illegal conspiracy and combination in restraint of trade for organizing the strike. This case led to
the agitation by workers and to legalise the trade unions, the Trade Unions Act, 1926 was passed.
Section 17 lays down that "no office bearer or member of a registered Trade Union shall be liable to punishment
under sub-section (2) of Section 120-B of the Indian Penal Code (45 of 1860) in respect of any agreement made
between the members for the purpose of furthering any such object of the Trade Union as is specified in Section 15,
unless the agreement is an agreement to commit an offence."
Thus S. 17 confers immunity from liability in case of criminal conspiracy under S. 120-B of the IPC committed by an
office-bearer or member of a registered Trade Union. The immunity is available only in respect of agreements made
between the members for the propose of furthering any such object of the Trade Union as is specified in S. 15 of the
Act. If the agreement is an agreement to commit an offence, protection of S. 17 is not available.
The effect of S. 17 is that an agreement by two or more members of a registered Trade Union to do or cause to be done any
act in furtherance of a trade dispute shall not be punishable as a conspiracy unless such act if committed by an
individual constitutes an offence. In R.S. Ruiker verses Emperor, AIR 1935 Nag. 149, it was held that "Trade Unions have
the right to declare strikes and do certain acts in furtherance of trade disputes. They are not liable civilly for such acts or
criminally for conspiracy in the furtherance of such acts as Trade Unions Act permits, but there is nothing in that Act
which apart from immunity from criminal conspiracy allows immunity from any criminal offences. Indeed any
agreement to commit an offence, would under S. 17 of the Trade Union Act, make them liable for criminal
conspiracy..." An agreement to commit an offence would under S. 17 make the member of a Trade Union liable for
criminal conspiracy. But when the members of the Union resorts to unlawful confinement of persons or criminal tress
pass or they indulge in criminal assault or mischief to a person or property there is no exemption from liability.
Immunity from Civil Suits in Certain Cases
Section 18 of the Trade Unions Act deals with the immunity from civil suits in certain cases. The section is reproduced
below:
"(1) No suit or other legal proceedings should be maintainable in any Civil Court against any registered Trade
Union or any office-bearer or member thereof in respect of any act done in contemplation or furtherance of a trade
dispute to which a member of the Trade Union is a party on the ground only that such act induces some other
person to break a contract of employment or that it is in interference with the trade, business or employment of
some other person or with the right of some other person to dispose of his capital or of his labour as he wills.
(2) A registered Trade Union shall not be liable in any suit or other legal proceeding in any Civil Court in
respect of tortuous act done in contemplation or furtherance of a trade dispute by an agent of the Trade Union if it is
proved that such person acted without the knowledge of, or contrary to express instructions given by the executive of
the Trade Union."
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Thus S. 18( 1) provides immunity to registered Trade Unions, their office-bearers and members from civil suits or other
proceeding of a civil nature in respect of any act done in contemplation or furtherance of a trade dispute on the
ground only that:
(a) Such act induces some other person to break a contact of employment (such as persuation exercised on
Trade Union members and others to join a strike), or
(b) such act is an interference (i) with the trade, business or employment of some other person, or (ii) with the
right of some other person to dispose of his capital or his labour as he wills.
Section 18(2) provides immunity to registered Trade Unions from liability in respect of tortuous acts done by their
agents in contemplation or furtherance of a trade dispute, if it is proved that the agent acted:
(a) without the knowledge of the executive of the Trade Union, or

(b) contrary to the express instruction given by the executive of the Trade Union
In Dalmia Cement Ltd. verses Narender Anandji, it was held that a registered Trade Union or their office bearers
are liable in civil action in tort for an act of deliberate trespass.
In Rohtas Industries Staff Union verses State of Bihar, it was held that S. 18 of the Trade Unions Act confers
immunity even in cases of strikes which are illegal under Section 22 to 24 of the Industrial Disputes Act provided it is
resorted to for the purposes of "furtherance of trade disputes". The employer is not entitled to claim any damages
against the workmen of a registered Trade Union which are found guilty of participation in such illegal strikes. Similarly in
Rohtas Industries Limited . Rohtas Industries Staff Union, AIR 1976 SC 425 the Supreme Court held that workers could
not be asked to make good the loss suffered by the employer because of the illegal strike the object of which was
inter-union rivalry. The decision of the Patna High Court was upheld by the Supreme Court in Rohtas Industries verses
Staff Union, (1976) 2 SCC 83.
In Reserve Bank of India verses Ashis Kusum Sen, (1962) 73 Cal. W.N. 388, it was held that to get the protection of S.
18, inducement for procurement of contract of employment in furtherance of a trade dispute or interference with the
business of another person in furtherance of a trade dispute must be by lawful means and not by means which would
be illegal or wrongful by other provisions of law. It was further held in this case that to threaten to induce breaches of
contracts of employment is not actionable. It was further laid' down that movement or agitation or
demonstration by the employees for the purpose of compelling employer to withdraw certain disciplinary proceedings
initiated against some of them was in contemplation or in furtherance of trade dispute and thus immune from action the
Civil Court.
Thus if the acts done in contemplation or furtherance of a trade dispute involve any violence or other criminal offence
then the immunity will not be available. The acts of peaceful picketing are protected under S. 18. In D. Ganesh verses State of
Bombay, AIR 1961 Bom. 459, picketing has been defined as the marching to and fro before the premises of an
establishment involved in a dispute, generally accompanied by the carrying and display of a sign or banner, etc. Picketing
may be accompanied by a polite request asking workers not to assist in the running of that establishment or customers
not to pertronise that establishment. The methods of persuasion are limited to oral and visual methods and they do not
extend to physical obstruction of a vehicle or person. Right to picket limited by the equal right of others to go about
their lawful affairs free from objection or intimidation. In Simpson & Group Companies Workers & Staff Union
verses Amco Batteries Ltd., (1992) 1 Lab. L.J. 266 (Ker.), it was held that immunity under S. 18 of the Trade Unions Act,
1926 does not extend to physical interference or duress with free movement of executives, contractors, staff,
suppliers and other persons or physically obstructing the free movement of cars, vehicles and lorries carrying raw
materials, work-in-progress and finished products into and out of the factory premises.
In West India Steel Company Ltd. verses Azeez, (1990) II LLJ 133 (Kerala), a Trade Union leader obstructed work
in the factory for five hours protesting against deputation of workman to work in another section of the factory. It was
held that a worker, including a Trade Union leader, inside the factory is bound to obey the reasonable instruction
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given by his superiors and carry out the duties assigned to him. The mere fact that such worker is a Trade Union leader
does not confer him any immunity in this regard.
Enforceability of agreements. Section 19 provides that notwithstanding anything contained in any other law for
the time being in force, an agreement between the members of a registered Trade union shall not be void or voidable
merely by reason of the fact that any of the objects of the agreement are in restraint of trade. It means that the
agreement between the members of a registered Trade Union not to accept employment unless certain conditions as
to pay, hours of work etc., are fulfilled, will not be void. The general rule that an agreement in restraint of trade is void as
laid down S. 27 of the Indian Contract Act, 1927 is affected by the provisions of S. 19 of the Trade Union Act, 1926.
There is an important proviso to the rule laid down in S. 19 of the Trade Unions Act, 1926. The proviso to S. 19 states
that nothing in this section shall enable any Civil Court to entertain any legal proceeding instituted for the purpose of
enforcing or recovering damages for the breach of any agreement concerning the conditions on which any members of
a Trade Union shall or shall not sell their goods, transact business, work, employ or be employed. It mean that the liability
created under the Act relates to the enforcement of an agreement, not to its validity.
In Workmen of Kamli Co-op. Sugar Factory1 Ltd. verses Management of Kamli Coop. Sugar Factory Ltd., (1995) 1 LLJ
727 (Karnataka), it was held that the trade union cannot enforce the right of recognition against the management
by a writ petition. An agreement ought to have been entered into between the trade union and the management for
granting recognition.
The account books of a registered Trade Union and the list of members thereof shall be open to inspection by an officebearer or member of the Trade Union at such times as may be provided in the rules of the Trade Union (S. 20). Rights of
minors to membership of Trade Unions
According to S. 21, any person who has attained the age of 15 years may be member of registered Trade Union.
This right is subject to any rules of the Trade Union. Such a member, subject as aforesaid, enjoy all the rights of a
member and execute all instruments and give all acquaintances necessary to be executed or given under the rules.
Disqualifications of office-bearers of Trade Unions
Section 21-A states the disqualifications of office-bearers of Trade Unions. According to it a person shall be
disqualified for being chosen as, and for being, a member of the executive or any other office-bearer of a Registered
Trade Union if:
(1) he has not attained the age of 18 years;
(2)
he has been convicted by a court in India of any offence involving moral turpitude and sentenced to
imprisonment, unless a period of five years has clasped since his release.
The expression 'moral turpitude' is not defined in the Act. Normally it refers to conduct which is contrary to the
accepted rules of morality whether it is or is not punishable as a crime.
Proportion of office-bearers to be connected with the Industry
Section 22(1) provides that not less than one-half of the total number of the office-bearers of every registered
Trade Union in an unrecognized sector. For the purpose of this section, "unorganized sector" means any sector which the
appropriate Government may, by notification in the Official Gazette, specify. Except as otherwise provided above,
all office-bearers of a registered Trade Union, except not more than one-third of the total number of the office-bearers
or five, whichever is less, shall be persons actually engaged or employed in the establishment or industry with which the
Trade Union is connected. For the purposes of this sub-section, an employee who has retired or has been restrenched
shall not be construed as outsider for the purposes of holding an office in a Trade Union. Sub-section (3) provides that
no member of the Council of Ministers or a person holding an office of profit (not being an engagement or employed in
an establishment or industry with which the Trade Union is connected), in the Union or a State, shall be a member of
the executive or other office-bearer of a registered Trade union shall be persons actually engaged or employed in an
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industry with which the Trade Union is connected. However the appropriate government may, by special or general
order, declare that the provisions of this section shall not apply to any Trade Union or class of Trade Unions specified in
the order.
Change of Name
According to S. 23, any registered Trade Union may, with the consent of not less than two-thirds of the total
number of its members change its name. This is subject to the provision of S. 25.
According to S. 25 (1) it is necessary to send to the Registrar notice in writing of every change of name, signed by the
Secretary and seven members of the Trade Union.
S. 25 (2) provides that if the proposed name is identical with that by which any other existing Trade Union has been
registered, or in the opinion of the Registrar, so nearly resembles such name as to be likely to deceive the public or the
members of either Trade Union, the change of name cannot be registered.
S. 25 (3) says that if the Registrar is satisfied that the provisions of this Act in respect of change of name have been
complied with he shall register the name in the Register, and the change takes effect from the date of registration.
According to Section 26, the change in the name of a registered Trade Union will not affect any rights or obligations
of the Trade Union or render defective any legal proceeding by or against the Trade Union. Amalgamation of Trade
Unions
Section 24 authorities two or more Trade Unions to amalgamate into one Trade Union, with or without dissolution
or division of funds. This is subject to the condition that the votes of at least one-half of the members of each or
every such trade union entitled to vote are recorded, and that at least sixty per cent of the votes are in favour of the
proposal.
Section 25 requires that notice in writing of every amalgamation signed by the Secretary and by seven members of
each and every Trade Union which is a party thereto, should be sent to the Registrar. In case the head office of the
amalgamated Trade Union is situated in a different State the notice should be sent to the Registrar of such State.
If the Registrar of the State in which the head office of the amalgamated Trade Union is situated is satisfied that the
provisions of this Act in respect of amalgamation have been complied with and that the Trade Union formed thereby is
entitled to registration under S. 6, he shall register the Trade Union in the manner prescribed in S. 8. The amalgation
shall have effect from the date of such registration.
According to S. 26, an amalgamation of two or more registered Trade Unions shall not prejudice any right of any
such Trade Unions or any right of a creditor of any of them. Dissolution
According to S. 27, when a registered Trade Union is dissolved notice of dissolution has to be sent to the
Registrar within fourteen days of dissolution. The notice should be signed by seven members and by the Secretary of the
Union. If the Registrar is satisfied that the dissolution has been effected in accordance with the rules of the Trade Union
he has to register the fact of dissolution. Dissolution will take effect from the date of such registration.
Where the dissolution of a registered Trade Union has been registered and the rules of the Trade Union do not
provide for the distribution of funds of the' Trade Union on dissolution, the Registrar shall divide the funds amongst the
members in such manner as may be prescribed.
Returns
According to S. 28, every registered Trade Union has to submit to the Registrar: (1) an audited general statement of
receipt and expenditure and assets and liabilities of the Trade Union ending and existing on 31st December every year; (ii) a
statement showing all changes of office-bearers of the Trade Union with the statement mentioned in (1) above; and
(3) a copy of every alteration made in the rules within fifteen days of the making of the alteration.
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The Section further authorizes the Registrar or any officer authorised by him to inspect the certificate of registration,
account books, registers and other documents relating to the Trade Union. Power to make Regulation
The appropriate government may make regulation for the purpose of carrying into effect the provisions of this Act
(A. 29). The power to make regulations conferred by S. 29 is subject to the condition of the regulations being made
after previous publication (S. 30). Failure to submit returns
Section 31 deals with penalties for certain acts and omissions. The punishment is that of fine only.
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1

RADHIKA SETH, PLEASE VOTE , BALLOT No. 2

These notes are prepared by Radhika Seth,

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Definition of Industrial Dispute

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The Act also makes provision for the following matters:

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Registration of Trade Unions